MARKETING MANAGEMENT

Dr. Prasanna Kumar Y N

BBM, MBA(HR&FINANCE), (PhD-MANAGEMENT),
D.LITT
MODULE ONE:
ESSENTIALS OF MARKETING
MODULE ONE:
ESSENTIALS OF MARKETING :
− Importance of marketing
− Core marketing concepts
− Company orientation towards market place
− Marketing management tasks
− Marketing strategies and plans
− SWOT analysis
− Marketing environment
− Competitive dynamics
What Is Marketing?
 Marketing is about identifying and meeting human and social needs. One of the
shortest good definitions of marketing is “meeting needs profitably.”

 Marketing is a societal process by which individuals and groups obtain what

they need and want through creating, offering, and freely exchanging products
and services of value with others.

 Marketing is about identifying and meeting human and social needs.

 Marketing is meeting needs profitably.

 When eBay recognized that people were unable to locate some of the
items they desired most, it created an online auction clearinghouse.

 When IKEA noticed that people wanted good furnishings at

substantially lower prices, it created knockdown furniture. These two
firms demonstrated marketing savvy and turned a private or social
need into a profitable business opportunity
 Managers sometimes think of marketing as “the art of selling products,” but many
people are surprised when they hear that selling is not the most important part of
marketing!

 Selling is only the tip of the marketing iceberg. Peter Drucker, a leading
management theorist, puts it this way: There will always, one can assume, be need
for some selling. But 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.
What Is Marketing Management?

Marketing management is the art and science of choosing target

markets and getting, keeping, and growing customers through creating,
delivering, and communicating superior customer value.
Marketing vs Sales:
What Is Marketed?
 Goods
 Services
 Events Experiences
 Persons
 Places
 Properties
 Organizations
 Information Ideas.
IMPORTANCE OF MARKETING:
IMPORTANCE OF MARKETING:
 The first decade of the 21st century challenged firms to prosper financially and
even survive in the face of an unforgiving economic environment.

 Marketing is playing a key role in addressing those challenges. Finance,

operations, accounting, and other business functions won’t really matter without
sufficient demand for products and services so the firm can make a profit.

 In other words, there must be a top line for there to be a bottom line.
Thus financial success often depends on marketing ability.
 Marketing’s broader importance extends to society as a whole.

 Marketing has helped introduce and gain acceptance of new products

that have eased or enriched people’s lives. It can inspire
enhancements in existing products as marketers innovate to improve
their position in the marketplace.

 Successful marketing builds demand for products and services, which,

in turn, creates jobs. By contributing to the bottom line, successful
marketing also allows firms to more fully engage in socially
responsible activities.
IMPORTANCE OF MARKETING:
MARKETING HELPS TO BOOST THE SALES

PROVIDES EMPLOYMENT

BASIS FOR MAKING DECISIONS

SOURCE OF NEW IDEAS

TACKLING THE COMPETITION

CREATE TRUST

INCREASES AWARENESS
INCREASE IN STANDARD OF LIVING

INCREASE IN NATIONAL INCOMES

MARKETING AS A SOURCE OF INCOME AND REVENUE

PROVIDE QUALITY PRODUCTS

MANAGING CONSUMER EXPECTATIONS

Core marketing concepts
1.NEEDS, WANTS, AND DEMANDS :

Needs are the basic human requirements such as for air, food, water,
clothing, and shelter. Humans also have strong needs for recreation,
education, and entertainment.

These needs become wants when they are directed to specific objects
that might satisfy the need.
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 would like the dealer to include an onboard GPS
navigation system.)

5. Secret needs (The customer wants friends to see him or her as a savvy
consumer.)
Demands are wants for specific products backed by an ability to pay.

Many people want a Mercedes; only a few are able to buy one.
Companies must measure not only how many people want their
product, but also how many are willing and able to buy it.
Needs – Basic human requirements / States of felt deprivation • Air, food, water,
clothing, shelter, health, education, entertainment, transportation, health, security

Wants – Needs directed to specific objects to satisfy the need – Wants are shaped
by culture and individual personality.

Demands – Wants backed by an ability and willingness to pay

2.Target Markets, Positioning, and Segmentation
 Not everyone likes the same cereal, restaurant, college, or movie. Therefore,
marketers start by dividing the market into segments.

 They identify and profile distinct groups of buyers who might prefer or require
varying product and service mixes by examining demographic, psychographic,
and behavioral differences among buyers.

 After identifying market segments, the marketer decides which present the
greatest opportunities— which are its target markets.

 For each, the firm develops a market offering that it positions in the minds
of the
target buyers as delivering some central benefit.

 Volvo develops its cars for buyers to whom safety is a major concern,
positioning
Market segment
– A group of customers who share a similar set of needs and wants
–A group of buyers who share common characteristics, needs,
purchasing behavior, or consumption patterns
Target market(s)
• which the company would like to serve, and
• toward which all marketing efforts will be directed
Positioning
– The act of designing a company’s offering and image to occupy a
distinctive place in the minds of the target market
– Arranging for a product to occupy a clear, distinctive, and desirable
place relative to competing products in the minds of target consumers
Segmentation:

Demographic, Psychographic, And Behavioral

3.OFFERINGS AND BRANDS
Value proposition
– Set of benefits that a firm offers to satisfy customer needs

Offering
– Physical form of intangible value proposition
– Combination of products, services, information and experiences

Brand
– Offering from a known source
4.Value and Satisfaction
The buyer chooses the offerings he or she perceives to deliver the most value, the
sum of the tangible and intangible benefits and costs to her. Value, a central
marketing concept,

Value is primarily a combination of quality, service, and price (qsp), called the
customer value triad.

Satisfaction reflects a person’s judgment of a product’s perceived performance in

relationship to expectations.
If the performance falls short of expectations, the customer is disappointed. If it
matches expectations, the customer is satisfied. If it exceeds them, the customer is
delighted.
5.Marketing Channels

To reach a target market, the marketer uses marketing channels.

Communication channels deliver and receive messages from target
buyers
Channels used by a firm to reach its target market Three types
– Communication channels
– Distribution channels
– Service channels
• Communication channels deliver and receive messages from target buyers
and include newspapers, magazines, radio, television, mail, telephone,
billboards, posters, fliers, CDs, audiotapes, and the Internet. Beyond these,
firms communicate through the look of their retail stores and Web sites and
other media.

• The marketer uses distribution channels to 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.

• To carry out transactions with potential buyers, the marketer also uses service
channels that include warehouses, transportation companies, banks, and
insurance companies. Marketers clearly face a design challenge in choosing the
best mix of communication, distribution, and service channels for their offerings.
Paid, Owned and Earned Media
6.Supply Chain

The supply chain is a longer channel stretching from raw materials to

components to finished products carried to final buyers.
7.Competition
Competition includes all the actual and potential rival offerings and
substitutes a buyer might consider.
8.Marketing Environment
The marketing environment consists of the task environment and the
broad environment.
– Task environment
Actors engaged in producing, distributing and promoting the offering –
The company, suppliers, distributors, dealers, target customer

– Broader environment
PESTLE factors
Company orientation towards market place
THE PRODUCTION CONCEPT
– Premise
Consumers prefer products that are widely available and inexpensive.

– Company concentrates on
• High production efficiency
• Low costs
• Mass distribution
THE PRODUCT CONCEPT
– Premise
Consumers favor products offering the most quality, performance, or
innovative features.
–“Better mousetrap” fallacy, , believing a better product will by itself
lead people to beat a path to their door
A new or improved product will not necessarily be successful.
–Clear understanding of consumer requirements, right pricing, and
correct positioning are essential.
THE SELLING CONCEPT

– Premise
Consumers and businesses, if left alone, won’t buy enough of the
organization’s products.

– Practiced aggressively for unsought goods

– Hard sell may boomerang!
Consumers coaxed into buying the product may bad-mouth it, return it,
or complain to consumer forums.
THE MARKETING CONCEPT
– Premise
The key to achieving organizational goals is being more effective than
competitors in creating, delivering, and communicating superior
customer value to your target markets
– Customer-centered, sense-and-respond philosophy –
Focus on
-Understanding consumer requirements, preferences,
behavior
-STP
-Decisions on 4 Ps based on above
HOLISTIC MARKETING CONCEPT
 The holistic marketing concept is based on the development, design,
and implementation of marketing programs, processes, and activities
that recognize their breadth and interdependencies.

 Holistic marketing acknowledges that everything matters in

marketing—and that a broad, integrated perspective is often
necessary
Relationship Marketing
 Relationship Marketing Increasingly, a key goal of marketing is to
develop deep, enduring relationships with people and organizations
that directly or indirectly affect the success of the firm’s marketing
activities.

 Relationship marketing aims to build mutually satisfying long-term

 Relationships with key constituents in order to earn and retain their
business.

 Four key constituents for relationship marketing are customers,

employees, marketing partners (channels, suppliers, distributors,
dealers, agencies), and members of the financial community
(shareholders, investors, analysts).

 Marketers must create prosperity among all these constituents and

balance the returns to all key stakeholders. To develop strong
relationships with them requires understanding their capabilities and
resources, needs, goals, and desire
The operating principle is simple: build an effective network
of relationships with key stakeholders, and profits will follow
Integrated Marketing
Integrated marketing occurs when the marketer devises marketing activities and
assembles marketing programs to create, communicate, and deliver value for
consumers such that “the whole is greater than the sum of its parts.” Two key
themes are that

(1) many different marketing activities can create, communicate, and deliver
value
and
(2) marketers should design and implement any one marketing activity with all
other activities in mind
All company communications also must be integrated. Using an
integrated communication strategy means choosing communication
options that reinforce and complement each other.

A marketer might selectively employ television, radio, and print

advertising, public relations and events, and PR and Web site
communications so each contributes on its own as well as improving
the effectiveness of the others.

Each must also deliver a consistent brand message at every contact

Internal Marketing
Internal marketing, an element of holistic marketing, is the task of hiring, training,
and motivating able employees who want to serve customers well.

It ensures that everyone in the organization embraces appropriate marketing

principles, especially senior management. Smart marketers recognize that
marketing activities within the company can be as important—or even more
important— than those directed outside the company. It makes no sense to
promise excellent service before the company’s staff is ready to provide it.
• Marketing is no longer the responsibility of a single department—it is a company-
wide undertaking that drives the company’s vision, mission, and strategic
planning.

• It succeeds only when all departments work together to achieve customer goals

• when engineering designs the right products, finance furnishes the right amount
of funding, purchasing buys the right materials, production makes the right
products in the right time horizon, and accounting measures profitability in the
right ways. Such interdepartmental harmony can only truly coalesce, however,
when management clearly communicates a vision of how the company’s
marketing orientation and philosophy serve customers
PERFORMANCE MARKETING
Performance marketing requires understanding the financial and
nonfinancial returns to business and society from marketing activities
and programs.

Top marketers are increasingly going beyond sales revenue to examine

the marketing scorecard and interpret what is happening to market
share, customer loss rate, customer satisfaction, product quality, and
other measures. They are also considering the legal, ethical, social, and
environmental effects of marketing activities and programs.
FINANCIAL ACCOUNTABILITY
Marketers are increasingly asked to justify their investments in financial and profitability terms, as
well as in terms of building the brand and growing the customer base. They’re employing a broader
variety of financial measures to assess the direct and indirect value their marketing efforts create
and recognizing that much of their firms’ market value comes from intangible assets, particularly
brands, customer base, employees, distributor and supplier relations, and intellectual capital.

Marketing metrics can help firms quantify and compare their marketing performance along a
broad set of dimensions. Marketing research and statistical analysis assess the financial efficiency
and effectiveness of different marketing activities. Finally, firms can employ processes and systems
to make sure they maximize the value from analyzing these different metrics
SOCIAL RESPONSIBILITY MARKETING
Because the effects of marketing extend beyond the company and the
customer to society as a whole, marketers must consider the ethical,
environmental, legal, and social context of their role and activities.
Marketing Management Tasks
Marketing Management Tasks
 Marketing strategies and plans
 Capturing marketing insights
 Connecting with customers
 Building strong brands
 Creating value
 Communicating value
 Delivering value
 Conducting marketing responsibly for long-term success
Marketing strategies and plans
The Central Role of Strategic Planning Successful marketing thus
requires capabilities such as understanding, creating, delivering,
capturing, and sustaining customer value.

Only a select group of companies have historically stood out as master

marketers.

These companies focus on the customer and are organized to respond

effectively to changing customer needs. They all have well-staffed
marketing departments, and their other departments accept that the
customer is king.
To ensure they select and execute the right activities, marketers must
give priority to strategic planning in three key areas:

 Managing a company’s businesses as an investment portfolio

 Assessing strength of each business considering the market’s

growth rate and the company’s position and fit in that
market

 Establishing a strategy (game plan) to achieve long-term

objectives of each business
Marketing-oriented Strategic
Planning
• The marketing plan is the central instrument for directing and coordinating the
marketing effort. It operates at two levels: strategic and tactical.

• The Strategic marketing plan lays out the target markets and the firm’s value
proposition, based on an analysis of the best market opportunities.

• The Tactical marketing plan specifies the marketing tactics, including

product features, promotion, merchandising, pricing, sales channels, and
service
Large companies consist of four
organizational levels:
–Corporate

–Division

–Business unit

–Product (product line, brand)

Corporate & Division Strategic Planning:
1. Defining the corporate mission

2. Establishing strategic business units

3. Assigning resources to each strategic business unit

4. Assessing growth opportunities

Business Unit Strategic-
Planning
SWOTAnalysis

Positive Negative
Strengths Weaknesses
Internal
Internal capabilities that Internal limitations that may
Analysis may help company achieve interfere with company’s
its objectives ability to achieve its
objectives

Opportunities Threats
External
Analysis External factors that External factors that
company may be able to may challenge
exploit to its advantage company’s performance
Strengths
andWeaknesses
 These may be in any part of the company, for example:

– Marketing
– Sales
– Manufacturing
– R&D
– Finance
– HR
– IT
– Procurement
– Management structure, systems and procedures
– Organizational culture
Opportunit
ies
A marketing opportunity is an area of buyer need and interest that a
company
has a high probability of profitably satisfying.
Threats
An environmental threat is a challenge posed by an unfavorable trend or
development that, in the absence of defensive marketing action, would lead to
lower sales or profit.
Sources of
Opportunities
 Evolving customer needs  Liberalization
 Favorable exchange  Globalization
rates  Technological
 Vulnerable competitors advances
 New geographies  Fashions, fads, trends
 New market segments  Changingcustomer
 M & A opportunities preferences
 Partnership opportunities  Untapped demand
 Change of government  Growth in economy
 Tax incentives offered by  Competitor’sunhap
some states py customers
Sources of
Threats
 Globalization
 Liberalization
 Fashions, fads,
trends  Appreciation of rupee
 Loss of key  Technology obsolescence
personnel  Innovations by competitors
 Change of
government
 Declining market demand
 Downturn in
 Substitute products/
economy services
 Changing  Political unrest
customer tastes  Epidemics, terrorism
 Weather
 Increased
SWOTAnalysis
 Leverage the strengths

 Eliminate the weaknesses

 Exploit the opportunities

 Defend the company against threats

Typical Contents of a Marketing
Environment
 Situation analysis
 Marketing strategy
 Marketing tactics
 Financial projections
 Implementation
controls
Most frequently cited shortcomings

–Lack of realism

–Insufficient competitive
analysis

–Short-run focus
Core Competency
Core Competency
A core competency has three characteristics:
(1) It is a source of competitive advantage and makes a significant
contribution to perceived customer benefits.
(2) It has applications in a wide variety of markets.
(3) It is difficult for competitors to imitate.
Competitive advantage ultimately derives from how well the company has fitted its
core competencies and distinctive capabilities into tightly interlocking “activity
systems.”

Competitors find it hard to imitate Southwest Airlines, Walmart, and IKEA because
they are unable to copy their activity systems.

Sometimes realignment may be necessary to maximize core competencies.

It has three steps:
(1) (re)defining the business concept or “big idea”,
(2) (re)shaping the business scope, and
(3) (re)positioning the company’s brand identity
What We Covered in this
Unit
ESSENTIALS OF MARKETING :

− Importance of marketing
− Core marketing concepts
− Company orientation towards market place
− Marketing management tasks
− Marketing strategies and plans
− SWOT analysis
− Marketing environment
− Competitive dynamics