Slides of my session at ITM, Mumbai. Introduction to Marketing. Session 1. Includes:
What is Marketing
Marketing Defined
Core Concepts
Marketing Process
Marketing Philosophies
Towards new marketing assumptions
Functions of Marketing
The Four 4 Ps The Marketing Variables
Market Segmenting
Identify sub-markets within market
Decide which one(s) to pursue (target)
Design marketing mix(es) to be attractive to targeted segment's
Demographics - age, race, sex, income, education
Geographic - country, state, urban/rural, climate
Psychographics -attitudes, values, beliefs, personality traits
Behavioral - benefits, usage.
Market consists of people with both the desire and ability to buy
2. Agenda
What is Marketing
Marketing Defined
Core Concepts
Marketing Process
Marketing Philosophies
Towards new marketing assumptions
Functions of Marketing
The Four 4 Ps The
Marketing Variables
Market Segmenting
Identify sub-markets within market
Decide which one(s) to pursue (target)
Design marketing mix(es) to be attractive to targeted segment's
Demographics - age, race, sex, income, education
Geographic - country, state, urban/rural, climate
Psychographics -attitudes, values, beliefs, personality traits
Behavioral - benefits, usage.
Market consists of people with both the desire and ability to buy
4. What is Marketing?
Social definition – 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
Management definition – It is the process of
planning and executing the conception,
pricing, promotion and distribution of ideas,
goods and services to create exchanges that
satisfy individual and organizational goals.
Marketing is an art and science
5. Function of Marketing
Marketing is meeting the needs of both the marketer
and the customer Profitably.
The aim of marketing is to know and understand the
customer so well that the product or service fits him
and sells itself
8. Needs and Wants
Needs are basic human requirements.
Real needs
Stated needs
Unstated needs (assumptions)
Delight needs
Secret needs
Wants are needs directed to specific objects/services
that might satisfy the need.
10. Demand
Want for a specific product backed by an ability to
pay.
Marketers should try to shape the wants. Many
customers don't know what they want when the
product, concept or service is new.
So companies help the customers to learn what they
want.
11. Exchange
Get something (product /service) by offering
something in return.
Eg. kind (barter) or money (value )
Exchange is a value creating process because it
leaves both parties better off
(win – win situation)
12. Transaction
A transaction is an exchange between two things of
value on agreed conditions and a time and place of
agreement.
To make successful transaction a marketer should
understand what each party expects from
transaction.
13. What all gets Marketed today?
Goods
Services
Events
Experiences
Persons
Places
Properties
Organizations
Information
Ideas
15. Production concept
Consumers will prefer products that are widely
available and inexpensive.
Managers of production oriented businesses
concentrate on achieving high production efficiency,
low costs, mass distribution.
16. Selling Concept
It stems from the belief that consumers if left alone,
will ordinarily not buy enough of the organization’s
products. The organization must therefore,
undertake and aggressive selling and promotion
effort.
The aim is to sell what companies make rather that
what the market wants.
17. Marketing Concept
Everything is from the customer’s end.
Customer-centered, sense and response
philosophy.
The job is to find right products for your
customers.
The key to achieve organizational goals consists of
the company being more effective than competitors
in creating, delivering and communicating superior
customer value to its chosen target markers.
18. Holistic Marketing Concept
Based on development, design and
implementation of marketing programs, processes
and activities
Relationship Marketing - Building long term mutually
satisfying relations with customers, suppliers,
distributors in order to retain their long term preference
and business.
Integrated Marketing - The tools that an organization
employs to pursue its marketing objectives in the target
market
Product, Price, Place, Promotion
4 C’s – Customer solution, Cost, Convenience,
Communication
19. Holistic Marketing Concept
Internal Marketing
Marketing Department
Senior Management
Other departments
Socially Responsible Marketing
Cause and effect if marketing clearly extend beyond the company
and the customers.
Ethics
Environment
Legal
Community
20. Societal marketing Concept
Organization’s tasks 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.
21. Marketing Concept versus Selling Concept
Starting Point Focus Means Ends
The Marketing Concept
Customer Integrated Profits from
Market
needs marketing satisfied customers
The Selling Concept
Sell and Profits through
Factory Product
Promote it sales volume
22. “A customer is the most
important visitor on our
premises. He is not
dependent on us. We are
dependent on him. He is
not an interruption in our
work. He is the purpose of
it. He is not an outsider in
our business. He is part of
it. We are not doing him a
favor by serving him. He is
doing us a favor by giving
us an opportunity to do so.”
23. Marketing Defined
Marketing is the activity, set of instructions, and
processes for creating, communicating, delivering,
and exchanging offerings that have value for
customers, clients, partners, and society at large.
OLD view of NEW view of
marketing: marketing:
Making a sale Satisfying
—“telling and customer needs
selling”
24. Why is Marketing Important?
Shifting Business Paradigm
Buyers’
markets
Sellers’
markets
26. Marketing and Customer Value
Value and Satisfaction
Value = Benefits/Costs
Benefits = Functional Benefits + Emotional benefits
Costs = Monetary costs + Time + Energy + Psychic costs
27. Value Creation and Delivery sequence
Before actually coming out with the product, the
marketer must do:
Customer segmentation
Market selection focus
Value positioning
28. How is it done?
Providing the value
Product development
Service development
Pricing
Distribution
Communicating the value
Sales force
Sales promotion
Advertising
29. Value Chain
Understanding the value chain helps in creating
better customer value
The primary activities
Procurement of raw materials (inbound logistics)
Converting them into final products (operations)
Shipping out final products (outbound logistics)
Marketing them (marketing and sales)
Provide services
30. Value Chain (Contd)
Support activities
Procurement
Technology development
Human resource management
Firm infrastructure
Value exploration
How can a company identify new value opportunities?
Value creation
How can a company differently create more promising new value
offerings?
Value delivery
How can a company use its capabilities and infrastructure to deliver
the new value offerings more efficiently?
31. Strategic Planning
A game plan for achieving company’s long term
objectives.
Key areas
Managing company’s business as an investment portfolio
Assessing each business that market.
Establishing a strategy.
33. Marketing Plan
It summarizes what the marketer has learnt about
the marketplace and indicates how the firm plans to
reach its marketing objectives.
It contains guidelines for marketing programs and
financial allocations over the planning period.
34. Marketing Plan
A marketing plan is the central instrument for
direction and coordination the marketing efforts.
The strategic marketing plan lays out the target
markets and the value proposition that will be
offered 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.
35. Objectives of the marketing plan
Acts as a roadmap
Assist in management control and monitoring the
implementation strategy
Informs new participants in the plan of their role
and function
To obtain resources for implementation
To stimulate thinking and make better use of
resources.
36. Contents of a Marketing Plan
Summary of main goals
Situation analysis
Marketing strategy
Financial projections
Sales forecast an expense forecast and break even analysis.
Implementation controls
Review of each period’s results, steps to be taken in response to
specific environmental developments such as price wars.
37. 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 or service?
Why should customers buy from us?
42. The Marketing Mix
The tools available to a business to gain the reaction
it is seeking from its target market in relation to its
marketing objectives
7Ps – Price, Product, Promotion, Place, People,
Process, Physical Environment
Traditional 4Ps extended to encompass growth of
service industry
44. Product
Methods used to
improve/differentiate
the product and increase
sales or target sales more
effectively to gain
a competitive advantage
e.g.
Extension strategies
Specialised versions
New editions
Improvements – real or
otherwise!
Changed packaging
Technology, etc.
48. Place
The means by which products and services get from
producer to consumer and where they can be
accessed by the consumer
The more places to buy the product and the easier it is made to
buy it, the better for the business (and the consumer?)
52. People
People represent the business
The image they present can be important
First contact often human – what is the lasting image they
provide to the customer?
Extent of training and knowledge
of the product/service concerned
Mission statement – how relevant?
Do staff represent the desired culture
of the business?
54. Process
How do people consume services?
What processes do they have to go through to
acquire the services?
Where do they find the availability
of the service?
Contact
Reminders
Registration
Subscription
Form filling
Degree of technology
56. Physical Environment
The ambience, mood or physical presentation of the
environment
Smart/shabby?
Trendy/retro/modern/old fashioned?
Light/dark/bright/subdued?
Romantic/chic/loud?
Clean/dirty/unkempt/neat?
Music?
Smell?
57. The Marketing Mix
Blend of the mix depends upon:
Marketing objectives
Type of product
Target market
Market structure
Rivals’ behaviour
Global issues – culture/religion, etc.
Marketing position
Product portfolio
Product lifecycle
Boston Matrix
58. The Marketing Mix
Blend of the mix depends upon:
Marketing objectives
Type of product
Target market
Market structure
Rivals’ behaviour
Global issues – culture/religion, etc.
Marketing position
Product portfolio
Product lifecycle
Boston Matrix
63. Learning Goals
1. Learn the three steps of target marketing, market
segmentation, target marketing, and market positioning
2. Understand the major bases for segmenting consumer
and business marketing strategy
3. Know how companies identify attractive market segments
and choose target marketing strategy
4. Realize how companies position their products for
maximum competitive advantage in the marketplace
7 - 63
64. Case Study - Procter & Gamble
• Sells multiple brands • Has also identified
within the same product different niches within
category for a variety of certain segments
products • Product modifications
are useful: Tide offers
• Brands feature a
seven different product
different mix of benefits formulations to serve
and appeal to different different niches’ needs
segments
7 - 64
65. Steps in market segmentation, targeting and
positioning
Market Segmentation
Identify bases for segmenting the market
Develop segment profiles
Target Marketing
Develop measure of segment attractiveness
Select target segments
Market Positioning
Develop positioning for target segments
Develop a marketing mix for each segment
7 - 65
67. In other words…
A market segment is a subgroup
of people or organizations sharing
one or more characteristics that
cause them to have similar product
needs.
it is distinct from other segments
(heterogeneity across segments)
it is homogeneous within the segment
(exhibits common attributes)
it responds similarly to a market
stimuli
it can be reached by a market
intervention
68. Purpose
Increase marketing
efficiency by focusing
marketing efforts to a
particular group
Maximize scarce
marketing resources
Find a market with
limited competition
Select the most
profitable segment
85. Requirements for Effective Segmentation
Measurable
Measurable • Size, purchasing power, profiles
of segments can be measured.
Accessible
Accessible • Segments must be effectively
reached and served.
Substantial
Substantial • Segments must be large or
profitable enough to serve.
Differential
Differential • Segments must respond
differently to different marketing
mix elements & actions.
Actionable
Actionable • Must be able to attract and serve
the segments.
86. Market Segmentation Process
1. Determine the characteristics of segments in the
target market & separate these segments in the
market based on these characteristics.
2. Verify the market segments size if adequate
enough to support the organization's product.
3. Develop a marketing strategy to target this
market.
Finance, operations accounting , production and other functions will not really matter if there is no sufficient demand for the products and services. What marketing isn’t Presentation & image - “spin” Glossy brochures & expensive advertising Persuasive selling methods Excessive/wasteful packaging
Eden in Chennai. Madras Café in Mumbai Matunga. Waiting period for Toyota Fortuner is 8 months
Need – Roti, Kapda, Makaan Wants – Beyond these. Maslow’s need Hierarchy
Roti Kapda Makaan Shelter – Removal from danger Love, affection, intimacy, being a part of groups Self Esteem & esteem from others Achieving individual potential
What is the best drink for a party? What is the best thing to do to share a good news? How heavy are you? What should you do about it?
You can have any colour you want as long as it is black Until 1950s
1950s to 60s
Marketing orientation Customer needs are focus of firm “ Find a need and fill it” Flexible production/distribution methods Organisational philosophy Profitability rather than sales volume 1970s onwards
Building long term relationships between suppliers & customers Ensuring that interaction is a pleasurable experience Customer service and attention focused Loyalty cards 1980s onwards
Ethics driven Considers needs of society as a whole Government pressure Pressure groups 1990s onwards
Offer should contain value for the product.
Look to the future Make well informed decisions Marketing myopia Organisation describes itself in PRODUCT rather MARKET terms Making slide rules? Creating a competitive edge
Anything that’s done must be first planned. Implementation & Control then go hand in hand. Bridge in Spain between 2 valleys took 14 years to build. Actual build time was just 3 years. Almost 11 years were spent only on the planning!
Mature Market - 14% of the Canadian population often referred to as the WWII cohort
McDonalds Maharaja Mac in India. No Beef in India. No pork in Pakistan.
Dell offers its website in different languages for different segments of customers across the globe!
Effective Segmentation This CTR relates to the material on pp. 215. Requirements for Effective Segmentation Measurability . This refers to the degree to which the size and purchasing power of the segments can be measured. The accuracy and availability of measures of market potential are important. Accessibility. This refers to the degree to which a market segment can be reached and served. Identifying a segment is useless if the marketer has limited access to the customer. Substantiality. This refers to the degree to which the segments are large or profitable enough to service. Actionability . This is the degree to which an effective marketing program can be designed for attracting and serving segments. Company resource limitations figure prominently in actionability issues.