Basic concepts of Marketing management

1. MARKETING MANAGEMENT
By
A.RAJA
Basic Concepts of Marketing
(Total 13 No. of Basic concepts covered)

2. CONCEPTS COVERED
 Levels Of Market Segmentation
 Process Of Targeting The Market
 Company Orientations Towards Market Place
 Nature And Scope Of Marketing
 Process Of Marketing Management.
 Adapting Price
 Marketing Mix
 Segmentation Basis For Consumer Markets
 Objectives Of Pricing
 Positioning
 Pricing And Its Objectives
 Evaluating Market Segments
 Market Targeting Strategies

3. INTRODUCTION
MARKETING:
Marketing is about identifying and meeting human and social needs.
“Marketing is the business process by which products are matched with the market and through
which the transfer of ownership are affected”
-Cundiff and Still
WHAT IS MARKETED:
Goods Services
Events Experiences
Persons Places
Properties Ideas
Information Organizations
TOPIC : LEVELS OF MARKET SEGMENTATION

4. MARKET SEGMENTATION:
Segmentation is dividing the market by grouping the customer with the similar tastes and
preferences into one segment. It is becoming increasingly important for marketers.
LEVELS OF MARKET SEGMENTATION
 Segment marketing
 Individual marketing
 Niche marketing
 Local marketing

5. SEGMENT MARKETING:
A market segment consists of customers who share a similar set of
needs and wants. Marketers divide the target market into different segments on the basis of
homogeneous needs.
The market does not create the segments, the marketers task is to identify the segments and
decide which one to target.
Eg: automobile companies in India offer different versions of the same model with different
features

6. INDIVIDUAL MARKETING:
Individual marketing is a extreme level of segmentation in which marketer focus on
individual customers
It is also known as customization marketing.
E.g. : paint companies, such as Asian paints, kansai Nerolac, Bergar paints follow the mass
customization strategy in paint retailing. These companies facilitate customers to mix and
match colors of their choice from the catalogue and the desired colors are mixed in
quantities as per the requirements of the customers, using the equipment's installed at the
retail points.

7. NICHE MARKETING:
A niche market is more narrowly defined customer group seeking a
distinctive mix of benefits. Marketers usually identify niches by dividing a segment into sub
segments.
Eg: EZEE, the liquid detergent from Godrej is a fabric –washing product for woolen clothes.
It is fairly small but has size, profit and growth potential .
LOCAL MARKETING:
It is a marketing programs tailored to the needs and wants of local
customer groups in trading areas. The prominence of local market is soo dominant that even
if a product proves to be successful at national or global level it may fail utterly at local level
because of unmatched local taste and preferences.

8. MARKET TARGETING
Market targeting is a broad term that is used to describe the process of
identifying groups of consumers who are likely to purchase a specific good or
service .
PROCESS OF MARKET TARGETING
The market targeting process involves following two steps
 Evaluating the market segments to target
 Selecting the target market .
PROCESS OF TARGETING THE MARKET

9. STEP 1 : EVALUATING THE MARKET SEGMENTS
In evaluating different market segments the company must look at two factors .
• segment overall attractiveness
• company’s objectives and resources
The firm must know whether a potential segment has the characteristics that
make it generally attractive such as size , growth etc.
The firm must consider its own objectives and resources in relation to the
segment . Some attractive segments may be dismissed as they do not match the
company’s objectives

10. STEP 2 : SELECTING THE TARGET MARKETS
After evaluating different segment the company must decide which and how many
segments to serve . This is the problem of target market selection . The company can
consider five patterns of target marketing selection
1. Single segment concentration
2. Selective specialization
3. Product specialization
4. Market specialization
5. Full market coverage

11. 1 . Single segment concentration
The company must select a single segment . Through concentrated marketing
company will gain a strong knowledge of the segment needs and achieves a strong
marketing presence .
M1 M2 M3
P1
P2
P3

12. 2. Selective specialization
Here the firm selects a number of segments each objectively attractive and
appropriate . There may be a little or no synergy among the segments but each
segment promises a money maker .
M1 M2 M3
P1
P2
P3

13. 3. Product specialization
Here the company specializes in making a certain product that it sells to
several segments . Through the product specialization the firms build a strong
reputation in the specific product area but it may face a risk that the product may be
supplanted by new technology .
M1 M2 M3
P1
P2
P3

14. M1 M2 M3
P1
P2
P3
4. Market specialization
Here the firm concentrates on serving many needs of a particular
customer group . The firm gains a strong reputation in the customer groups
but the downside risk is that the customer groups may have its budgets cut .

15. 5. Full market coverage
Here the firm attempts to serve all customer groups with all the
products they might need . Only very large firms can undertake market coverage
strategy . Large markets cover the whole market in two broad ways .
Undifferentiated marketing
Differentiated marketing
M1 M2 M3
P1
P2
P3

16. Marketing concepts / philosophies
 The company orientation towards marketplace deals with the concepts
which a company may apply while targeting a “Market”.
1. Production Concept
2. Product Concept
3. Selling Concept
4. Marketing Concept
5. Societal Marketing Concept
Company orientations towards market place

17. 1. PRODUCTION CONCEPT :
 It is the one of the oldest concepts in business.
 The 17th century of the industrial revolution brought about the production
concept, which continued till the late 1920’s.
 It refers to the philosophy that “ SUPPLY CREATES ITS OWN DEMAND”.
 It holds that consumers prefer products that they are widely available and
inexpensive.
 It is also used when a company wants to expand the market.

18. 2. THE PRODUCT CONCEPT :
 The product concept holds that consumers will favor those products that offer the
more quality, performance or innovative features.
 Basically this concept is about attracting the customers by improving the quality
and performance on one hand & offering attractive prices on the other hand.
 Hence, the managers in the organization focuses on making superior products &
improving them over time.

19. 3. THE SELLING CONCEPT :
 The selling concept began in 1920’s and followed till mid 1950’s.
 The concept of selling focuses on the large-scale selling and promotion activities in
order to attract more customers.
 Most firms practice the selling concept when they have overcapacity.
 The firm aim is to sell what they make rather than what the market wants.
 It offers only short-term advantage not for long-term gains.

20. 4. The marketing concept :
 It is consumer oriented concept.
 This marketing concept emerged in 1950’s.
 The job is not to find the right customer for products, but right products
for customers.
 Instead of product centered (make-and-sell) philosophy, business
shifted to customer centered (sense-and-respond) philosophy.

21. 5. SOCIETAL MARKETING CONCEPT :
 The societal marketing is the newest of five marketing management philosophies.
 It focuses to improve the well-being of customers and society as a whole.
 The companies adopting this concept can achieve long-term profit.
 Two primary elements of this concept are
 High level of human life.
 Pollution free atmosphere.

22. MARKETING :
• American marketing association defines marketing as , “ An
organizational function and a set of processes for creating,
communicating and delivering value to customers and for managing
customer relationships in ways that benefit the organization and its
stake holders”.
Nature and scope of marketing

23. Nature of marketing :
• Integrated process
• Customer oriented
• Systematic process
• Creative in nature
• Goal oriented
• Continuous process

24. Scope of marketing :
• Goods : Physical goods constitute the bulk of most countries
production and marketing efforts.
• Services : As economies advance a growing proportion of their
activities focus on production of services.
• Places : Cities , states , regions and whole nations compete actively
to attract tourists ,factories ,company head quarters and new
residents.

25. • Properties : These are intangible rights of ownership of either real
property or financial property.
• Organizations : Organizations actively work to build a strong, favorable
and unique image in the minds of their target publics.
• Ideas : Every market offering includes a basic idea. Products and
services are platforms for delivering some idea or benefit.

26. INTRODUCTION
MARKETING MANAGEMANT:
It is a combination of marketing plus management.
 It is branch of total management and is concerned with the direction of
those activities towards attainment of marketing goals.
DEFINITION
According to Philip Kotler ,” Marketing management is the process of
planning and executing the conception, pricing and promotion and
distribution of goods, services and ideas to create exchanges that satisfy
individual and organizational objectives ”.
PROCESS OF MARKETING MANAGEMENT.

27. PROCESS OF MARKETING MANAGEMENT
SETTING MARKETING OBJECTIVES:
 The organizational mission provides the priorities for scanning the
environment and finding out the opportunities.
ANALYSING MARKETING OPPORTUNITIES:
 This involves analysis of opportunities in the light of company
strengths and weakness both internal and external.

28. RESEARCHING AND SELECTING TARGET MARKETS:
 It needs to know how to measure attractiveness of any given market.
 Marketing people must understand the major techniques for measuring market
potential and forecasting future demand.
DESINING MARKETING STRATEGIES:
 “ Marketing strategy defines the broad principles by which the business unit expects
to achieve its marketing objectives in a target market. It consists of basic decisions on
total marketing expenditure, marketing mix and marketing allocation “.

29. PLANNING MARKETING PROGRAMMES:
 It is not enough to formulate only the broad strategies by which the business expects
to achieve its marketing objective but also plan the supporting marketing mix
programmes.
 Without such programmes even the best conceived marketing strategies may fail.

30. ORGANISING,IMPLEMENTING AND CONTROLLING THE
MARKETING EFFORT:
 The final stage in the marketing management process is organizing the marketing
resources and implementing and controlling the marketing plan.
 The company is required to design a marketing organisation that will be able to
degenerate the marketing plan upto work i.e., implementing its effort.

31. Adapting the price :
 Companies usually do not set a single price , but rather a price
structure .
 Because of discounts , allowances and promotional support the
company rarely realizes the same profit from each unit of product
that it sells
ADAPTING PRICE

32. Price adaptation strategies
 Geographical pricing
 Price discounts and allowances
 Promotional pricing
 Differentiated pricing

33. GEOGRAPHICAL PRICING :
The company decides how to price its products to different
customers in different locations and countries.
Many buyers offer other items in payment. This is known as
countertrade.
•Barter
•Compensation deal
•Buyback arrangement
•Offset

34. PRICE DISCOUNTS AND ALLOWANCES :
The companies will adjust their list price and give discounts and
allowances for early payment, volume purchases and off season buying.
The discounts undermine the value of perceptions of offerings.
Manufacturers in over capacity situations give discounts to retailers .
This should be stopped because they may end up losing long-run profits
in an effort ot meet short run volume goals.

35. PROMOTIONAL PRICING :
Loss – leader pricing : supermarkets can drop price on well – known brands
to stimulate additional store traffic.
Manufacturers of loss leader brands typically object because this dilutes their
brand image.
 special- event pricing : special prices in special seasons.
Cash rebates : help in clearing the inventories without cutting the stated
list price.
 low interest financing :
Warranties and service contracts: promote sales by adding free or low cost
warranty or service contract.
Psychological discounting : sets an artificial high price and then offer the
product at substantial price .

36. DIFFERENTIATED PRICING :
Customer segment pricing :
Product-form pricing
Image pricing
Channel pricing
Location pricing
Time pricing

37. Marketing is the process of finding out customer needs and serving those
needs profitably.
Marketing deals with identifying and meeting human and social needs .
Marketing is an organizational function and a set of process for creating
communicating and delivering value to customers and for managing
customer relationships in ways that benefit the organization and its stake
holders
MARRKETING
Marketing Mix

38. Marketing mix
Marketing mix is a particular combination of the product, its price, the
methods to promote it and the ways to make the product available to the
customer.
Based upon its understanding of customers, a company will develop its
marketing mix of product,price,place and promotion.
The elements of marketing mix are sensitively related to each other.

39. Product
 Product decision involves deciding what goods or services should be offered to
customers.
The product or service serves the basic need of the customer.
 The product provides the primary value to the customer.
An important element of product strategy is new product development.

40. Price
Price is the cost that customers is willing to bear for the product and the way it is made
available to customer.
 Price represents on a unit basis what the company receives for the product which is
being marketed.
 All other elements of the marketing mix represent costs.
 Marketers need to be very careful about pricing objectives, methods to arrive at a price
and the factors which influence setting of a price.

41. Promotion
Decision have to be made with respect to promotional mix:
advertising, personal selling, sales promotions, exhibition, sponsorship and public
relations. By these means, the target audience is made aware of the existence of the
product and the benefits that it confers to customers.

42. Place
Place involves decisions concerning distribution channels to be used, the
location of outlets, methods of transportation and inventory levels to be held.
 The product should be available in the right quantity, at the right time and place.
Distribution channels consist of independent intermediaries such as retailers,
wholesalers and distributors through which goods pass on their way to customers.
These intermediaries provide cost-effective access to the marketplace.

43. Effective marketing mix
An effective marketing mix must meet customer needs better than competitors .
 Various elements of the marketing mix should be synchronized with one another.
 It should also be mindful of the company’s resources.

44. Marketing Segmentation
According to Philip kotler , “ Market segmentation is sub-dividing a
market into distinct and homogeneous subgroups of customers, where
any group can conceivably be selected as a target market to be met
with distinct marketing mix.”
Segmentation Basis for Consumer Markets

45. • Market Segmentation is a method of “dividing a market
(Large) into smaller groupings of consumers or
organizations in which each segment has a common
characteristic such as needs or behavior.”

46. Segmentation Basis for Consumer Markets
Consumer market can be segmented into various segments by using different
basis. Basis of consumer segmentation can be broadly divided into 4 Categories
which are as follows:

47. Geographic Segmentation
Marketers can segment according to geographic criteria—nations,
states, regions, countries, market size ,market density or climate.
Eg : McDonalds' globally, sell
burgers aimed at local markets, for
example, burgers are made from
lamb in India rather then beef
because of religious issues. In
Mexico more chilli sauce is added
and so on.

48. Demographic Segmentation
In demographic segmentation the market is divided into grouped on
the basis of following variables.
• Age and life cycle
• Gender
• Martial status
• Income
• Family Size
• Occupation
• Education level

49. •As people age their needs and wants change, some organizations develop
specific products aimed at particular age groups for example nappies for babies,
toys for children, clothes for teenagers and so on.
•Gender segmentation is commonly used within the cosmetics, clothing and
magazine industry.
For example titan and titan Raga

50. Psychographic Segmentation
Even though the two may be of the same age, from the same
profession, with similar education and income , each of the
customers may have a different attitude towards risk taking and
new products.
• life style
• values
• Beliefs
• Personality

51. • Occasion
Regular : Like Holi, Diwali
Special : Marriage, Anniversary
• Benefits
Shampoo for hair conditioning, cleaning , hair fall defense ,
dandruff control
• Usage rate
light – medium – heavy user
• Loyalty status
hardcore loyal , split loyal- loyal to 2-3 brand ,shifting loyal,
switcher
Behavioral Segmentation

52. Meaning and definition of pricing
 Pricing is the art of translating quantitative terms ( rupees and
paisa) the value of the product or a unit of a service to customers at a
point in time.
 Pricing is a powerful marketing instrument for a company. Every
marketing plan involves a pricing decision.
 Marketers must make accurate and planned pricing decisions.
Objectives of pricing

53. Objectives
To maximize the profits :
 The preliminary objective of the pricing decisions is to maximize
profits for the concern and therefore pricing policy should be
determined in such a way so that the company can earn the
maximum profits
Price stability :
 As far as possible the prices should not fluctuate too often .
 A stable price policy above can win the confidence of the customers.

54. Competitive situation:
 One of the main objective of the price decision is to face the competitive
situation in the market .
 Prices of the commodities should be fixed keeping in the mind the
competitive situation .
Achieving a target-return:
 This is common objective of well established and reputed firm in the
market .
 The prices of the product are so calculated as to earn that rate of
return on investment .

55. Ability to pay:
 price decisions are sometimes taken according to the ability of
customers to pay i.e, more prices can be charged from persons
having capacity to pay.
 Capacity to pay is determined on the basis of purchasing power of
the consumers for which the product is made.

56.  Capturing the market:
 One of the objective of pricing decision may be capturing the market.
 A company especially big company, at that time of introducing the
product in the market fixes comparatively lower prices for its products .

57. Long-run welfare of the firm:
 The main aim of some concerns is to fix the price of the product
which is in the best interest of the firm in the long run keeping the
market conditions and economic situations in mind.
Resource mobilization:
Under this objective, the firm fixes the prices of its products in
such a way that it can accumulate sufficient resources for its
expansion.

58. POSITIONING
positioning is the act of designing the company’s offerings and image to
occupy a distinctive place in the minds of the target market.
“positioning start with a product a piece of merchandize ,a service ,a
company ,an institution ,or even a person. but positioning is not what you do to product.
positioning is what you do to the mind of the prospect, that is, you position the product in
the mind of the prospect” .
RIES AND TROUT
POSITIONING

59.  POSITIONING STRATEGIES
Positioning strategy is aimed at building brand differentiation
with in the value frame of the target market.
ATTRIBUTE POSITIONING
PRICE/QUALITY POSITIONING
USE OR APPLICATION POSITIONING

60.  PRODUCT USER POSITIONING
 PRODUCT CLASS POSITIONING
 BRAND ENDORSEMENT POSITIONING

61. DEVELOPING &COMMUNICATING A POSITIONING STRATEGY
 Competitors identification
 Determining how competitors are perceived and evaluated
 Determining the competitors position
 Analyzing customers preferences
 Making the positioning decision
 Monitoring the position

62. PRICING
 According to Prof. K.C .Kite ,’Pricing is a managerial task that involves
establishing pricing objectives, identifying the factors governing the price
,ascertaining their relevance and significance, determining the product
value in monetary terms and formulation of price policies ,implementing
and controlling for best results.’
PRICING AND ITS OBJECTIVES

63. OBJECTIVES
 To maximize profits.
 Price stability.
 Ability to pay.
 Capturing the market

64. OBJECTIVES
 Competitive situation.
 Resource mobilization.
 Margin of profit to middleman.

65. INTRODUCTION
 Market segmentation is the process that companies use to divide
large heterogeneous markets into small markets that can be reached
more efficiently and effectively with products and services that
match their unique needs
 The concept of market segmentaion is based on the fact that the
market of commodities are not homogenous but they are
heterogeneous
EVALUATING MARKET SEGMENTS

66. Evaluating Market Segments
 Segment size and growth
 Segment structural attractiveness
 Company objectives and resources

67. BASIS FOR IDENTIFYING TARGET CUSTOMERS
Segment size and growth
• Smaller versus larger segments
• Growth potential

68. CONT.....
Segment structural attractiveness
• Competition
• Substitute products
• Power of buyers
• Power of suppliers

69. CONT......
Company objectives and resources
• Competitive advantage
• Availability of resources
• Consistent with company objectives

70. Market targeting:
It is used to describe the process of identifying group of
customers who are highly purchase a specific good or service.
Market targeting approaches:
 Broad cultivation of a market.
 Identifying markets that are small but somewhat lucrative.
MARKET TARGETING STRATEGIES

71. Single-segment strategy
It also known as concentrated strategy. One market segment (not
the entire market) is served with one marketing mix. A single-
segment approach often is the strategy of choice for smaller
companies with limited resources.
M1 M2 M3
P1
P2
P3
MARKET TARGETING STRATEGIES

72. Selective specialization
This is a multiple- segment strategy, also known as a
differentiated strategy. Different marketing mixes are offered to
different segments. The product itself may or may not be different –
in many cases only the promotional message or distribution
channels vary.
M1 M2 M3
P1
P2
P3

73. Product specialization
The firm specializes in a particular product and sell it to different
market segments.
Ex: Microscope manufacturers
M1 M2 M3
P1
P2
P3

74. Market specialization
The firm specializes in serving a particular market segment and
offers that segment an array of different products.
M1 M2 M3
P1
P2
P3

75. Full market coverage
The firm attempts to serve the entire market. This coverage can
be achieved by means of either a mass market strategy in which a
single undifferentiated marketing mix is offered to the entire
market, of by a differentiated strategy in which a separate marketing
mix is offered to each segment.
M1 M2 M3
P1
P2
P3

76. THANK YOU