Marketing Management

Marketing and Sales
Marketing is identifying the right product and satisfying the
customer.
Complied by Surabhi Singh

Marketing- Definitions
•Marketing is identification of product and satisfying the
customer.
•Marketing is defined as a social and managerial process by
which individuals and groups obtain what they want through
creating and exchanging product and value with others.(Kotler)
•Marketing is an organizing set of processes for creating,•Marketing is an organizing set of processes for creating,
communicating and delivering value to customers and for
managing customer relationship that benefit organization and its
stakeholders.(American Marketing Association)

Evolution of Marketing-
Historical Perspectives
Production Era
17th Century
Sales Era
1920-1950
Marketing Era
1950 onwards
Production Era- Produce as much as possible.Production Era- Produce as much as possible.
Manufacture product, sells product and maximizes profit thru
increased production
Sales Era- Convince customers to buy what marketers have.
Manufacture product, sells product thru aggressive selling and
maximize profit thru sales revenue.
Marketing Era- Give customers what they want
Manufacture product, market products and maximizes profit thru
customer satisfaction.

Scope of Marketing
Scope of Marketing
Services
Goods
Places
Information
Goods
Persons
Events
Experiences
Properties
Idea Organization

What is Marketed ?……
Goods: Physical goods – Vehicles, TV, refrigerators, tyre etc
Services: Banking, airlines, maintenance workshops, beauty parlors
Events: Trade shows, sporting events
Experiences: Amusement / water parksExperiences: Amusement / water parks
Persons: Celebrity marketing
Places: Tourist destinations
Organizations: Companies, educational institutions
5Complied by Surabhi Singh

‘Marketers’ and ‘Prospects’
• A marketer is someone who seeks a response( attention,
a purchase)from another party called a prospect.
• Marketers seek to influence the level, timing and• Marketers seek to influence the level, timing and
composition of demand.
Prospect: A company / person that you know will require your services and they
are looking to purchase.
Suspect: A company / person that you know will require your services but
nothing else is known

Objectives of Marketing
•Creating Demand for the products by identifying the
need and wants of customers
•Increasing the market share of organization
•Building the goodwill of the organization
•Increasing profits and achieving long term goals
through customer satisfaction

Organizations
People
or
Organizations
Marketers to consider
THREE specific factors:
Marketers to consider
THREE specific factors:
People and organizations
with needs
Purchasing power
Needs
to
Satisfy
Market
What is a market?
Purchasing power
Buying behavior
Money
to
Spend
Willingness
to
Spend

Factory
Existing
Products
Selling
and
promoting
Profit
through
sales
volume
Start Focus Means Ends
Inside Out- Selling Concept
Market
Customer
Needs
Integrated
Marketing
Profits
through
customer
satisfaction
Outside in- Marketing Concept

Marketing Terms
Needs, wants
and demands
Markets Marketing offers
(products,
Exchanges,
transactions
and
relationships Value and
satisfaction
(products,
services and
experiences

Need – Basic human requirement. Food, clothing, shelter , Transport
Wants – Need becomes Wants when directed to specific objects that satisfy
needs – Mc Donald Burger is a want, Maruti car etc
Demand – are wants for specific products along with ability to pay – a Rolex
watch, a BMW car etc.
Desire – Having dinner in a five star hotel
Value – Perceived tangible and intangible benefits and cost to a customer
Satisfaction – Reflects a person’s comparative judgment in relation to his /
her expectations

• Negative Demand- The demand for air travel becomes negative when the
ticket prices increases.
• Non existent Demand- Demand of non burglar alarm is of non existence in
areas which are prone to criminal activities.
• Latent Demand- A demand for a product which is not satisfied by an
existing product. E.g- Demand for a low calorie ice cream is a latent
demand.
• Declining Demand- Refers to decreasing demand of a product. For Eg
Changing the ad of a product to attract customers.
Different Type of Demand
Changing the ad of a product to attract customers.
• Irregular demand- Demand that varies according to seasons or festive
occasions. E.g- During diwali the demand for chocolate increases- kuch
meetha ho jaaye, pappu pass ho gaya
• Full Demand- Refers to a situation when the demand for a product equates
supply.
• Overfull Demand- Implies a situation where a demand for a product
exceeds supply.
• Unwholesome Demand- Implies demand for a product that has
undesirable social consequences. Eg Destroying the demand of cigarrettes
by writing messages on the packet.Complied by Surabhi Singh

MARKETING CONCEPTS
• Production Concept- Manufacture, sell and
maximize profit thru production.
• Product Concept
• Selling Concept- Manufacture, sell and• Selling Concept- Manufacture, sell and
maximize profit thru sales revenue.
• Marketing Concept- Manufacture, sell and
maximize profit thru customer satisfaction.
• Customer Concept
• Societal Marketing Concept

Societal Marketing
Society
Human Welfare, environment
Consumers Company
(Needs, Wants, Satisfaction) (sales volume, profits, growth)
E.g CSC Complied by Surabhi Singh

What is meant by ‘Product’ ……
Anything that can be offered to a market that might satisfy a want or need
• In Retailing products are called merchandise
• In Manufacturing products are purchased as raw materials.
• In Insurance business, products are insurance policies
A brand is when the product is from a known source

Anyone who is in the market looking at a product /
service for attention, acquisition, use or consumption
CUSTOMER IS . . . . .
Who is a Customer ??
service for attention, acquisition, use or consumption
that satisfies a want or a need

Value –
The benefits the customers gain from using the product
versus the cost of obtaining the product.
Satisfaction –
Based on a comparison of performance and
expectations.expectations.
– Performance > Expectations => Satisfaction
– Performance < Expectations => Dissatisfaction
17
E.G Loss of market share of Nokia over Samsung and Apple

• CUSTOMER has needs, wants, demands and desires
• Understanding these needs…… is starting point of the
entire marketing
• These needs, wants …… arise within a framework or an
ecosystemecosystem
• Understanding both the needs…… and the ecosystem is
the starting point of a long term relationship
18
E.G Walmart , world’s largest retailer has reported profit under the
leadership of CEO Doug McMillon in a recent quarter in 2012. The
strategy used is cut cost and use price advantage on food items.

Marketing management is the conscious effort to achieve
desired exchange outcomes with target markets. The
marketer's basic skill lies in influencing the level, timing, and
composition of demand for a product, service, organization, place,
person, idea or some form of information. There are several
factors that participated role to evolution of marketing like:
1. Changes in Consumer Behavior
2. End of the mass market2. End of the mass market
3. Marketing Management Philosophies Production
concept
Product
Marketing Selling
Societal Marketing
4. Evolving Views of Marketing role

Opening a book shop on Campus
1. Is there a need? (Of having book shop)
2. What is my target market? (Who will be buying products from your
book shop)
3. What is my product?(Basic items to be sold)
4. How can I produce and deliver a “product” better than my
competitors?
5. How shall I promote my product?
6. How can I insure customer loyalty?

•Marketing Management is the art and science of choosing target
market and getting, keeping and growing customers through
creating, delivering and communicating customer value.
•Marketing management is a broad scope of the study of marketing
focusing on the practical application of the techniques and
marketing activities of a certain company or business.
•This business discipline encompasses marketing planning and
strategy, orientations, and processes needed in attaining company
Marketing Management
strategy, orientations, and processes needed in attaining company
goals by providing value to clients.
•Since it has a wide coverage involving all factors required to
satisfy customers, marketing management must be all-pervasive
and part of every employee’s scope of work, from the subordinates
to those in the higher management.
•E.g- Lenovo, Chinese PC maker has cornered the largest
share in Indian PC market overtaking DELL and HP in March,
2012.

Marketing Management Process
• Analysis/Audit - where are we now?
• Objectives - where do we want to be?
• Strategies - which way is best?• Strategies - which way is best?
• Tactics - how do we get there?
• Implementation - Getting there!
• Control - Ensuring arrivalComplied by Surabhi Singh

Strategy & Tactics
Peter Drucker says: "Strategy is doing the right things, tactics is
doing things right.“
• Strategy is ‘perspective’. that is, your vision and direction or ‘Future Picture
and Direction’. Strategy involves the "big picture" - the overall plan, and how
those plans will achieve your goals and objectives
• Strategy is the set of directions you make to enhance your situation and• Strategy is the set of directions you make to enhance your situation and
position within your overall market.
• Tactics are the day-to-day activities that are repeatable in your business and
relatively clear-cut.
• Tactics are the actual ways in which the strategies are executed. They may also
include such things as newsletters, press releases,advertising, websites etc
•

Elements of Marketing Strategy - example
Segmentation and Target Market – ‘Well to do urbanites’ in India, the fashion
conscious with a taste for good things in life.
Product Strategy – Premium product bases on modern technology – cover all four
major segments of the business: saris, suiting, shirting and dress materials
Distribution Strategy -- Through showroom or ‘exclusive retail outlets’ – VIMALDistribution Strategy -- Through showroom or ‘exclusive retail outlets’ – VIMAL
SHOWROOMS leading to jumbo ‘VIMAL PRESTIGE SHOWROOMS’
Pricing Strategy – Value Pricing ( The company wanted high volumes ). Vimal
fabrics to be seen by customers as good value for money.
Promotion Strategy – ONLY Vimal concept – focus on technology, R&D. Promote
through exclusive fashion shows.

Philip Kotler says, “Marketing
Management is the art and science of
choosing target markets and building
profitable relationship with them.profitable relationship with them.

INNOVATIONS IN MODERN MARKETING
•De marketing- Kotler and Levy have coined the concept
demarketing a situation which may come as a result of temporary
shortages occassioned by short term excess demand for a
company’s products.
•Re marketing- Takes the form of finding certain new uses of users
for an existing product.
•Over marketing- Constitutes the striving by a firm to generate
increased sales while neglecting quality control, production efficiencyincreased sales while neglecting quality control, production efficiency
and cash flow management. E.g Auto Industry- Since the advent of
Japanese imported cars, American auto companies escalated
advertisements to protect themselves from foreign competition.
•Meta marketing- Eugene J Kelly developed this concept by saying
that meta marketing is the synthesis of all managerial, traditional,
scientific, social and historical foundations of marketing .
The concept is developed as the marketing appears to be moving
towards broader horizon.

Market
Insight
Focus
Strategic
Content
Innovation

Customer Value
Customer value is the difference between the values the customer gains from
owning and using a product and the cost of obtaining the product. On the
other hand we may understand that the total customer value is the total sum
of product value, services value, personnel value and image value. Besides
these monetary, time, physic and energy costs are the total costs of a customer.
Should the customer value be expressed as a formula:
Total Customer value = Product value + services value + personnel value +
image value Total customer cost = Monetary cost + time cost + physic cost +image value Total customer cost = Monetary cost + time cost + physic cost +
energy cost Customer Delivered value = Total Customer value – Total customer
cost
Customer value is the difference between total customer value and total
customer cost. Put it very simply, customer value is created when the
perceptions of benefits received from a transaction exceed the costs of
ownership. The same idea can be expressed as a ratio
(Chiristopher,1996):
Customer value = Perceptions of benefits

•Marketing is the art of attracting and keeping customers.
•Losing profitable customers can affect firm’s profit.
•Maximizing customer value means cultivating customer relationship.
•CRM is the process of managing the customer information and
carefully managing all touch points to maximize customer satisfaction.
Creating and Developing customer Value
•Touch points are an essential component which needs considerable
attention
•For hotels the touch points are room service, check in and out, exercise
facilities.
•CRM consists of four steps-
1. Identify prospects
2. Differentiate customers in terms of customer needs.
3. Interact with individual customer
4. Customize products or services

Creating and Developing customer Value
•A recent collaboration between RIL and British Petroleum in 2012
has increased the percentage of FDI in India
•Hero MotoCorp has outrun Bajaj Auto in two wheeler . It has 45.17%
(2011-2012) share in market, Bajaj has 19.1 % share, TVS has 14.11%,
Suzuki Motorcycle has 2.52% , HMSI has 14.86% and Others have
1.59% share
•Karizma (Hero MotoCorp in premium segment), Pulsar(Bajaj Auto in
premium segment). Discover, sports bike by Bajaj
•Bajaj Moved out of scooter segment in 2009.
WHAT IS THE REASON???????
HERO – BAJAJ CASE STUDY

Requisites for Creating Value
•Companies should make an effort to know the total customer experience.
•Adding features to a product improves customer experience. Lexus
engineers add features and services designed to enhance the customer
experience and paying attention to a target price that deliver value to
customer.
•Pay attentions to target price
•Must understand customer satisfaction index.

Methods of developing customer value
1..Emphatic Design- An effective way to develop
improved recognition of customer desires and needs.
For this reason Honda’s effort to improve customer
experience includes observation of customer’s actual
experience.
•For instance videotaping consumer product use is one
form of the emphatic design. Emphatic design gives a
business the opportunity to learn more about the
customer’s usage experience.
•It is an observational approach to understanding
customer needs and discovering the problems
customers commonly encounter in acquiring.

Total Customer Experience
Purchase Experiences Usage
Experiences
Replacement
Experience
Information gathering
Prioritizing needs
Delivery &Installation
Product Usage
Product Upgrades
Returns andPrioritizing needs
Evaluating needs
Order placement and
payment
Product Usage
Product Maintenance
Product Repair
Returns and
Warranty
Product
Replacement
Product Disposal

2.. Hypothetical Videos: Current versus Desired
customer experience
•Observing customers in most business is not
possible, hence a business can create two
hypothetical videos of the customer experience. Video
I would be scripted sequence of scenes that describe a
typical customer experiences with respect to
acquisition, installation, use ,maintenance and disposalacquisition, installation, use ,maintenance and disposal
of the product. This video will be made from
customer’s perspective.
•Video I is not product specific. Video II would
redescribe the scenes of Video I and it provides the
opportunity for a business to discover new ways to
improve and communicate customer value.

•3. By the customer experience of lead users provides the
insight to
companies for improving a product by adding new features or
modifying it in other ways.
•4. Transforming a bad experience into customer Value
•5. Managing Customer Touch Points- Honda and 3M make
efforts to create additional benefit beyond product benefits. For
instance at product planning touch point if customer is not ableinstance at product planning touch point if customer is not able
to recognize the business solution, at product delivery touch
point product delivered late or damaged etc.
•6. Reverse Innovation- Invent to order- Reverse innovation
starts by listening to the customer experience and identifying
product benefits not provided by existing products. The first
Lexus car went through 1000 design changes based on
customer input. Complied by Surabhi Singh

7. Value Chain-
Michael Porter proposed the value chain as a tool for identifying
ways to create more customer value. The value chain identifies nine
strategically relevant activities that create value and cost in a
specific business.

8. Mass Collaboration- B D Tapscott laid out this concept.
With mass collaboration a business outsources its research
and development effort to people all over the globe any one
of whom could make the discovery, find the solution, or
propose the idea the business is looking for. Mass
collaboration gives the business a new approach to value
creation.
P&G uses mass collaboration to develop improved products.P&G uses mass collaboration to develop improved products.
The company uses mass customization offering a cash
award to the first scientist anywhere in the world who
produces and effective and safe molecule.
The four groups involved in mass collaboration are
prosumers, partnerships with professionals, suppliers,
employees.

Prosumers
Partners
Mass Collaboration
•Meaningful
Benefit
•Cost feasible
margins
•Fits product
Suppliers
Employees
•Fits product
platform and
strategy

Examples of Customer Value
•Dhara cooking oil and Frooti the mango drink were launched in tetra packs
giving advantage to the products.
•Reid & Taylor with the choice of Amitabh Bachchan as brand ambassador
gives better recall.
•Maruti Suzuki India Limited started producing maruti 800 in collaboration•Maruti Suzuki India Limited started producing maruti 800 in collaboration
with Suzuki Motor from 1983. It penetrated the metro, and other class I
towns thru twin advantages of fuel efficiency and affordability. It
subsequently revolutionized the automobile scene in India by entering class
II and III towns continuously adding new products in the automotive category
such as Gypsy, Omni, Bolero, Zen. It has diversified into automotive
insurance, buying and selling second hand cars thru maruti true value and
other initiatives.

Total Customer Value
Total customer value is the perceived monetary value of
the bundle or economic, functional, and psychological
benefits customers expect from a given market offering.

•Suppose the buyer for a large construction company wants
to buy a tractor from Caterpillar or Komatsu.
• The competing salespeople carefully describe their
respective offers.
•The buyer wants to use the tractor in residential
construction work.
• He would like the tractor to deliver certain levels of
reliability, durability, performance, and resolve value.
• He evaluates the tractors and decides that Caterpillar has
a higher product value based on perceived reliability,
durability, performance, and resale value

• He also perceives differences in the accompanying
services – delivery, training, and maintenance – and
decides that Caterpillar provides better service and
more knowledgeable and responsive personnel.
• Finally, he places higher value on Caterpillar’s
corporate image.
• He adds up all the values from these four sources –
product, services, personnel, and image – and
perceives Caterpillar as delivering greater customer
value.

Characteristics of Customer Value
• Choosing feature which consumer value the
most.
•Ranking of each feature•Ranking of each feature
•Compare features with a competitor.
•Monitor features vs. customer value over time.

Classification of Customer Value
• Functional
•Social
•Emotional
•Epistemic
•Conditional

Marketing of Customer Value
•Value Selection consists of Marketing planning, buyer
analysis, market segmentation and targeting.
•Value Delivery consists of Product development,
manufacturing, service planning, manufacturing,
pricing, distribution and servicing.pricing, distribution and servicing.
•Making a value proposition
•Communicating the value proposition
•Value Enhancement

Value Delivery : Examples
Standard Chartered Bank- It offers a global credit card
to all its card holders while other banks have only
country specific cards.
Godrej GE – This joint venture has encouraged existingGodrej GE – This joint venture has encouraged existing
customers to give feedback on how add value to
company’s products.
Customer Value: P&G Pringles Case Discussion

Customer Delight
The very favorable experience of the client of a business when they have
received a good or service that significantly surpasses what they had
initially anticipated.

Customer Satisfaction
Person’s feelings of pleasure or disappointment resulting
from comparing a product’s perceived performance in
relation to his or her expectation.
Xerox for example guarantees total satisfaction and will
replace at its expense any dissatisfied customer’sreplace at its expense any dissatisfied customer’s
equipmentfor a period of three years after purchase
DELL was the first in the industry to offer manufacturer
direct technical support.

Monitoring and Managing Customer Satisfaction
•The marketing task is to find ways to enhance customer value by improving
the perceived benefits and/or reducing the total costs of ownership.
•Both the numerator and the denominator of this ratio should be measured
relative to competitive offers. Total cost of ownership rather than price is used
here because in most transactions there will be costs other than price
involved.
•For example, inventory carrying costs, maintenance costs, running costs,•For example, inventory carrying costs, maintenance costs, running costs,
disposal costs and so on. In business-to-business markets, as purchasers
become increasingly sophisticated, the total cost of ownership can be a
critical element in the purchase decision (Ellram,1993). Life cycle costs, as
they are referred to in the banking and industries, have long been a critical
issue in procurement decisions in those markets.
•Companies have to understand their customers, to know where their
business sector is going as well as to anticipate what systems their
customers will need in order to remain at the very forefront of competition,
often to work with them both on future planning and on rapid implementation.Complied by Surabhi Singh

Methods for monitoring and managing customer satisfaction
•Complaint and suggestion systems
•Customer Satisfaction surveys
•Ghost Shopping- Companies can hire persons to pose
as potential buyers to report their strong and weakas potential buyers to report their strong and weak
points.
•Lost customer analysis- Companies should contact
customers who have stopped buying or switched to
another supplier. When IBM loses a customer, it
mounts thorough effort to learn where it failed.

The experience of customer and the experience of
the environment create the value change. Value
change is a developing process, which can be
accelerated by;
! Technological changes! Technological changes
! Conflict between existing values
! Dramatic events
! Uncovering of the other culture’s values

Turnover of Consumer Durable Player in
2012
Samsung- 200 Billion
LG – 162 Billion
Sony- 63.13 Billion
Hitachi- 54 Billion
Voltas- 45.57 Billion
Whirlpool- 31.35 Billion
Haier- 9.72 Billion

•Rise in profit of ITC shows its robustness of corporate
strategy.
•Toyota world’s second largest car maker is trying to
expand its market.
•Airtel, being the largest integrated telecom company in
India have shown growth in this year 2012.
Current Market News-2012
•IBM, Cadbury, Tesco are examples of corporate brand
names. Nesafe, Dulux, Castrol and intel are examples of
product brand names.
•TATA DOCOMO came with per second pricing strategy
that really made them popular.

Marketing Management

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