Marketing Management

Marketing Management :

Marketing Management Unit I

Definition :

Definition According to American Marketing Association, Marketing is defined as “ Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges that satisfies individual and organizational goals”

Nature of Marketing:

Nature of Marketing Marketing is an economic function of exchange It is a legal process by which ownership is transferred It is a system of interacting business activities It is managerial function of organization & directing business activities that facilitates the movement of goods from producers to consumers

Nature of Marketing:

It is a philosophy based on consumer orientation & satisfaction It has a dual objective – profit making and consumer satisfaction It is a social process by which the society gets goods and services for the satisfaction of needs. Nature of Marketing

Scope of Marketing:

Scope of Marketing Goods Services Experiences Events Persons Places Properties Organizations Information Ideas

Marketing Perspective:

Marketing Perspective Target Market & Segmentation Marketplace, Market space & Meta Market Need, Want, Demands Product, Offering & Brand Value and Satisfaction Exchange & Transactions Relationships & Networks Outcome of relationship is unique company asset called the Marketing Network Marketing Channels Communication channel, distribution & service channels

Marketing Perspective:

Supply chain Competition Brand Competition Industry Competition Form Competition Generic Competition Marketing Environment Task environment Immediate actor involved in producing, distributing and promoting the offering Broad environment Economic, Natural, Technological, Political-legal & socio cultural environment Marketing Perspective

Marketing Perspective:

Marketing Program Marketers task is to build a marketing program or plan to achieve the company’s desired objective. The marketing mix is a set of marketing tool the company uses to pursue its marketing objective in the target market. Marketing Perspective

Marketing Philosophies:

Marketing Philosophies The Production Concept The Product Concept The Selling Concept The Marketing Concept Target Market Customer Needs Integrated Marketing Profitability The customer concept The societal marketing concept

Slide 10:

SELLING MARKETING Selling starts with seller and is preoccupied all the time with the need of the seller It starts with the buyer and focuses constantly on the need of the buyer Seller is the center of the business universe, activities starts with the sellers existing product Buyer is the center of business universe, activities follows the buyer & his needs Emphasis on the saleable surplus available within the corporation Emphasis on identification of a market opportunity Seeks to quickly convert product into cash Seeks to convert customer needs into products Concerns itself with the tricks and techniques of getting the customer to part with their cash for the product available with the salesman Emphasizes on fulfilling the need of the customer Difference between Selling and Marketing

Slide 11:

Views business as a goods producing process Views business as a customer satisfying process Overemphasizes the exchange aspects, without caring for the value satisfactions inherent in the exchange Concerns itself primarily and truly with the value satisfactions that should flow to the customer from the exchange Seller preference dominates the formulation of the marketing mix Buyer determines the shape the marketing mix should take The firm makes the product first and then figures out how to sell it and make profit What is to be offered as a product is determined by the customer The firms makes a total product offering that will match and satisfy the identified needs of the customer The product is the consequence of the marketing effort; the marketing effort leads to products that the customers actually wants to buy in their own interest

Slide 12:

Emphasis on staying with the existing technology and reducing cost Emphasis on the innovation in every sphere; on providing better value to the customer by adopting better technology Sellers motives dominates marketing communications Marketing communication is looked upon as the tool for communicating the benefits/satisfactions provided by the product Cost determines the price Consumer determines price; price determines costs Transportation, storage and other distribution functions are perceived as mere extension of the production functions They are seen as vital services to be provided to the customer, keep customers convenience in focus Emphasis is on somehow selling; there is no coordination among the different functions of the total marketing task Emphasis is on integrated marketing; an integrated strategy covering product, promotion, pricing and distribution

Slide 13:

Different departments of the business operates as separate watertight compartment All department of the business operate in a highly integrated manner, the sole purpose being generation of customer satisfaction In firms practicing selling, production is the central functions of the business In firms practicing marketing, marketing is the central function of the business; the entire company or business is organized around the marketing function Selling views the customer as the last link in the business Marketing views the customer as the very purpose of the business; sees the business from the point of view of the customer; customer consciousness permeates the entire organization- all department and all the people in the organization –all the time

Value Proposition:

Value Proposition THE CONCEPT OF VALUE When we buy a product, we look at the mix of benefits that is bundled along with the product and offered to us. The Linkage Among Benefit-Value-Cost-Satisfaction Market Offering Price Mileage Service Brand Image CAR Price Mileage Service Brand Image Benefits Perceived value Of the benefit Cost of the product is less than the perceived value the greater is the Satisfaction

Slide 15:

THE MARKETING CONCEPT EXECUTED THROUGH VALUE DELIIVERY Satisfaction directly emanates directly from the value the firm delivers to the customer The firm searches & find out what value does the customer expects and build them into its market offer The marketing concept is in operation when the firm satisfies the customer by offering him superior value compared to competing offers The Firm Builds Benefits/Value into the Market Offer The firm incorporates the benefits that it wants to provide to the customer into its market offer It is through the value creating and value delivery system, the firms is able to make the market offer

Slide 16:

Marketing Mix, the Tool Kit The firms marketing mix is the tool kit available to it for delivering the intended value to the customer It is through the blending the marketing mix element into an attractive combination that the firm makes an offer to the customer By Adjusting any Element of the Mix, Value can be Enhanced The firm can enhance the value by adjusting any element of the marketing mix Example Increasing the functionality of the product Reducing the price of the product Giving better service support

Slide 17:

PROVIDING THE BEST VALUE-COST BALANCE Customer expect as many benefit as possible and the firms must also provide the maximum benefit in the market offer. Does the benefit offered have a cost associated with it? And at what cost should the company bundle the offer to the customer. The company should try to utilize its value delivery system in such a way that it arrives at a best possible value cost balance CUSTOMER’S MENTAL PROCESS OF JUDGING VALUE Every benefit promised by the product, carries a measure of value to the customer It is called as customer perceived value It is the job of the firm to pack its offer in such a way that a given segment of customer use predictable & uniform yardstick in estimating the value of the product.

Slide 18:

MARKETING IS VALUE CREATING AND VALUE DELIVERING PROCESS Marketing in its entirety is a value creating and value delivering process Marketing planning, buyer analysis, market segmentation and targeting are concerned with value selection Product development, manufacturing, service planning, pricing, distribution and servicing are concerned with value creation/value delivery Personal selling, advertising, publicity & sales promotion are concerned with value communication Four Steps in Value Providing Process Value Selection Value Creation/Value Delivery Value Communication Value Enhancement

Slide 19:

Value Selection It is the first step in the value delivering process Only after selecting the value to be offered, the firm proceed with production, sales and promotion. Value Creation/Value Delivery It is here that bulk of Marketing job happens. What the firm has promised has to be provided to the customer. All functional departments of the firm is actively involved in this process Value Communication After selecting the value and deciding how the value has to be created, communication has to made to the customer. The firm makes a value proposition and then communicates it to the customer.

Slide 20:

Making a Value Proposition Communicating the Value Proposition Value Enhancement Value Delivery (Examples) - Virgin Atlantic - Procter and Gamble (Pringles) Customer will Decide What Value is Customer Value, a crucial factor in Pricing Strategy