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marketing management

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Marketing Management:

Marketing Management

:

Marketing deals with identifying and meeting human and social needs. “ Meeting needs profitably”

What is Marketing?:

What is Marketing? Meeting needs profitably. Marketing deals with identifying and meeting human and social needs .

Defining Marketing:

Defining Marketing 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. - Philip Kotler

What is Marketing?:

What is Marketing? Marketing 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 objectives. More simply: Marketing is all about satisfying needs (...profitably and fairly)!!!

Marketing is an Exchange of Value:

Marketing is an Exchange of Value An exchange is the process by which some transfer of value occurs between a buyer and a seller. At least two people or organizations must be willing to make a trade, and Each must have something that other values. Each party is free to accept or reject the exchange offer Most exchanges occur in the form of a monetary transaction.

Why is Marketing Important?:

Why is Marketing Important? Marketing Creates Utility Form Utility Place Utility Time Utility Possession Utility

Scope of Marketing:

Scope of Marketing Goods Services Events Experiences Persons Places Properties

More..:

More.. Organisations Informations Ideas

Some terms:

Some terms Marketplaces : It is physical Marketspaces : It is digital Metamarket : A buyer getting involved in many parts of the this metamarket.

Slide 11:

Company’s orientations towards marketplace

The production concept:

The production concept It holds that the consumers will prefer the products that are widely available and inexpensive. So managers of production oriented businesses concentrate on achieving high production efficiency, low costs and mass distribution.

Product Concept:

Product Concept The product concept holds that consumer will favor those products that offer the most quality. Performance or innovative features. Managers in these organisation focus on making superior products and improving them over time.

The selling concept:

The selling concept It holds that consumers and businesses, if left alone will ordinarily not buy enough of the organisations products. The organisation therefore must undertaken aggressive and selling effort.

The Marketing Concept:

The Marketing Concept Instead of a product centered,’ make and sell” philosophy, business shifted to customer centered, “ sense and respond”. The job is not to find the right customer for your product but the right products for your customers

Holistic Marketing Concept:

Holistic Marketing Concept It recognises that “everything matters” with marketing- and that a broad, intergrated perspective is often necessary. There are four components of holistic marketing concept.

Four Components:

Four Components Relationship Marketing Integrated Marketing Internal Marketing Social Responsibility of Marketing

Consumer Market and Industrial Market:

Consumer Market and Industrial Market Fewer, Larger Buyers Close supplier customer relationship Professional purchasing Several buying influences Multiple sales calls Derived demand Inelastic demand Fluctuating demand Geographically concentrated buyers Direct purchasing

The Marketing Environment:

The Marketing Environment

Environment palys a crucial role in marketing and that securing the right fit between the environment and firm using the markeeting mix as the tool, is the crux of marketing.:

Environment palys a crucial role in marketing and that securing the right fit between the environment and firm using the markeeting mix as the tool, is the crux of marketing.

Factors to be covered in Environmental Analysis:

Factors to be covered in Environmental Analysis Mega/Macro environmental factors Demographic Envt. Socio-cultural Envt. Economic Envt. Political Envt. Natural Envt. Technology envt Legal Envt Govt Policies Business Specific factors The market/demand The consumer The industry The competition Govt policies(specific to business concerned) Supplier related factors

Demographic Envt:

Demographic Envt Demographic means factors relating population, such as size, rate, growth, age distribution, religious composition and literacy levels.

Demographic profile of India:

Demographic profile of India Population of over one billion. Population is growing at a rate of 2%. Average life expectancy is 62 years. Literacy rate is now 65%. Literacy rate in 1951 was 17%.

Socio cultural envt:

Socio cultural envt Culture, traditions, beliefs, values and lifestyles of the people in a given society constitute the socio-cultural envt.

Culture:

Culture It is the combined result of factors like religion, language, education and upbringing. Core cultural values which are deep rooted and do not change easily. Secondary cultural values which are more amenable to change.

Social class:

Social class A social class is determined by income, occupation, location of residence of its members. Each class has its own standards with respect to lifestyle, behaviour and they are known as class values or class norms.

Some facts on socio-cultural envt of India:

Some facts on socio-cultural envt of India Many religions like Hindu, Muslims, Sikhs, Christians, Zorastrians, Budhists and Jains. 17 major languages. Many cultures. The changing position of woman.

Political Envt:

Political Envt Form of govt. Political stability Social and religious organisations, media and pressure groups and lobbies of various kinds are also part of political envt.

Natural Envt:

Natural Envt Natural resources Ecology Climate

Economic Envt:

Economic Envt Various factors to be considered are: General economic conditions Credit availability and interest rates. Inflation rate Exchange rate Tax rates Price of important materials Energy scene Labor scene

Technology envt:

Technology envt Govt ‘s approach in respect to technology Options available un technology

Legal envt/Business legislation:

Legal envt/Business legislation Consumer protection act Employee protection Corporate affairs Sectoral protection Protection of society Regulations on products, price, distribution

Environmental factors specific to business:

Environmental factors specific to business

Market/Demand:

Market/Demand Nature of the demand Size of the demand, present and potential Changes taking place in demand Invasion of substitute products Changes taking place in consumption pattern/ buying habits

The consumer:

The consumer

Industry and competition:

Industry and competition Knowledge about industry and competition is a fundamental requirement for developing the marketing strategy.

Govt Policies:

Govt Policies Govt. are purchasers of goods and services. Govt. subsidise select firms and industries. Govt protect home producers against foreign competition. Govt ban fresh entry in select industries. Govt ban off and on certain products. In some cases, govt happens to be producers and function as competitor.

Supplier:

Supplier Suppliers constitute one of the forces shaping competition in industry.

Selling & Marketing:

Selling & Marketing Selling starts with the seller, and is preoccupied all the time with the needs of the seller and the seller’s existing products. Seller is the centre of the business universe. Emphasis is on saleable surplus available with corporation. Concerns itself with just the tricks and techniques of getting the customers to part with their cash for the products available with the salesman. Views business as a ‘goods-producing process’. Marketing starts with the buyers and focuses constantly on their needs. Buyer is the centre of the business universe; activities follow the buyer and his needs. Emphasis is on identification of a customer need/market opportunity. The aim is to convert customer ‘needs’ into ‘products’. Concerns itself with fulfilling the needs of the customers. Views business as a ‘customer-satisfying process’.

Contd….:

Contd…. Overemphasizes the ‘exchange aspect, without caring for the ‘value satisfactions’ inherent in the exchange. Sellers’ requirement and preference dominates the formulation of the ‘marketing mix’. The firm makes the product and then figures out how to sell it. Emphasis is on staying with the existing technology and reducing costs. Distribution functions are perceived as mere extensions of the production function. Concerns itself primarily and truly with the ‘value satisfactions’ that should flow to the customer from the exchange. Buyer determines the shape the marketing mix should take. ‘The product’ is determined by the buyer. The ‘product’ is the consequence of the marketing effort; the marketing effort leads to products that the customers actually want to buy in their own interest. Emphasis is on innovation in every sphere; on providing better value to the customer by adopting better technology. Distribution functions are seen as vital services to be provided to the customer, keeping customer’s convenience in focus.

Contd….:

Contd…. Sellers’ motives dominate marketing communications Cost determines the price. Emphasis is on ‘somehow selling’, there is no coordination among the different functions of the total marketing task. ‘Selling’ views the customer as the last link in the business. Marketing communications is looked upon as the tool for communicating the benefits/satisfactions provided by the product. Consumer determines price; price determines costs. Emphasis is on integrated marketing; covering all the 4 Ps. ‘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 organisation – all departments and all people in the organisation – all the time. All are organized around the marketing function.

Market Segmentation:

Market Segmentation

Market segmentation:

Market segmentation Dividing a market into smaller groups of buyers distinct needs, characterstics, or behaviour who might require separate products or marketing mixes. Dividing the heterogenous market into homogenous groups of buyers.

Bases of Segmentation:

Bases of Segmentation Geographic segmentation: Calls for dividing the market into geographical units such as nations, regions, states, cities.

Demographic segmentation:

Demographic segmentation Age and life cycle stage Gender Income

Psychographic segmentation:

Psychographic segmentation Social class Lifestyle

Behavioural segmentation:

Behavioural segmentation Occasions Benefit sought Usage rate Loyalty status

User status:

User status Non users Ex users Potential users First time users Regular users

Usage rate:

Usage rate Light product users Medium product users Heavy product users

Loyalty status:

Loyalty status Completely loyal Somewhat loyal Non loyals

Requirements for effective segmentation:

Requirements for effective segmentation Measurable Accessible Substantial Differential Actionable

Target Marketing:

Target Marketing Market segmentation reveals the firm’s market segment opportunities. The firm now has to evaluate the various segments and decide how many and which segments it can serve best.

Evaluating Market Segments:

Evaluating Market Segments In evaluating different market segments, a firm must look at three factors: segment size and growth, segment structural attractiveness, and company objectives and resources. The company must first collect and analyze data on current segment sales, growth rates, and expected profitability for various segments. It will be interested in segments that have the right size and growth characteristics.

Contd…:

Contd… The company also needs to examine major structural factors that affect long-run segment attractiveness. For example, a segments less attractive if it already contains many strong and aggressive competitors. The existence of many actual or potential substitute products may limit prices and the profits that can be earned in a segment.

Target Market:

Target Market A set of buyers sharing common needs or characteristics that the company decides to serve.

Select Target Markets:

Select Target Markets

Slide 57:

M1 M2 M3 P1 P2 P3 Single-segment Concentration

Slide 58:

M1 M2 M3 P1 P2 P3 Selective Specialization

Slide 59:

M1 M2 M3 P1 P2 P3 Product Specialization

Slide 60:

M1 M2 M3 P1 P2 P3 Market Specialization

Slide 61:

M1 M2 M3 P1 P2 P3 Full Market Coverage

Indian Examples of Market Segments:

Indian Examples of Market Segments Single Segment Concentration Woodland Shoes Selective Specialization Maruti Market Specialization Sultan Chand & Sons (Books Covering all types of student needs, schools, colleges & Institutes) Product Specialization Mahindra & Mahindra Jeeps Bajaj Auto Full Coverage Pepsi, Titan, Bata

CONCEPT OF POSITIONING:

CONCEPT OF POSITIONING The marketing manager needs to decide which segment to enter and how to target that segment with a product offer through selection of market segment ad target marketing strategy. The next step is to decide the company’s product offer and which image the company would like its costumers to develop. The challenge is to decide what position the company wants its product to occupy in the selected segment (s).

Contd…:

Contd… A product’s position is the definition that a consumer gives to the product on important attributes. It is the position in the perceptual space of the consumer’s mind that the product takes in relation to competitor’s products, which is often verbalized by customers on certain attributes. Positioning is an act of developing the company’s offerings and mage to occupy a distinct place in the minds of the target market.

Contd…:

Contd… According to Jack Trout and Al Ries brand positioning related not to what the marketing manager does with the product, it is what the marketing manager does to the mind of the prospects. The marketing manager should determine what similarity and difference the brand has with other brands and then communicates these differences to the customers.

Contd…:

Contd… Brand positioning involves implanting the brand’s unique benefits and differences in the customer’s mind. Maggi noodles is positioned in Indian market as a convenience food, which can solve the frequent food demand of the growing kids. Dove soap is positioned as a premium brand in the market with high moisturizer content, which can also be used as a face wash. Vicks Vaporub is positioned as a rub exclusively for the purpose of cold and cough relief.

PRODUCT POSITION VS. BRAND POSITION:

PRODUCT POSITION VS. BRAND POSITION Product positioning brings us to the idea of functional value whereas brand positioning talks about some think above and beyond functional value for which the customer is willing to pay more and when asked to recall, he may recall the brand more and given a chance to replay, he will associate the brand with so many elements which are beyond the functionality of the product. Therefore, a product position refers to a brand’s objective or functional attributes in relation to other brands in the category. It is a characteristic of the physical product and its functional attributes. Simply speaking, it stands for what it can do in the market.

Contd…:

Contd… Brand position on the other hand is an outcome of the perception of the target segment customers. It is the brand’s subjective or perceived attributes in relation to competing brands in the market. Let us take an example of Vicks Action 500. If you look at its product position, it’s an anti cold treatment, which has certain composition that reduces the congestion and helps during cold and cough. But if you go to a customer and ask what Vicks Action 500 does, you may get a number of answers like these.

QUALITIES OF A SUCCESSFUL POSITION:

QUALITIES OF A SUCCESSFUL POSITION

Relevance:

Relevance Positions that do not focus on important consumer benefits that have higher value for the target customers or reflect the character of the product fail in the market. Often in search of a point of differentiation, brand managers identify and position the brand on an attribute, which is different but is of little concern for the customers. The image of Ujala built on a value promise of consumer benefits in the form of whiteness is an example of a powerful position.

Distinctiveness:

Distinctiveness Customer have few needs that are unfulfilled and the consumers have many choices to fill the needs they have. If a brand’s position lacks distinctiveness, it will be forced to compete on the basis of price or promotion that are expensive propositions and may not build brand equity in the long run.

Coherence :

Coherence There is a need to integrate all forms of communication to bring coherence to the brand’s position. For example, a brand being positioned as premium but being available in a discount store or with a price off very often dilutes the premium position of the brand. All the brand elements, starting from packaging to stickers to media in which the brand is positioned should have coherence in communication for building a strong position.

Commitment:

Commitment Once a position is adopted, it takes commitment to stay committed to the position in the face of competitor's threat to ensure the long-term position of the brand in the market. A generic positioning has no meaning because a position appealing to everyone does not appeal to a specific segment.

Durability:

Durability The brand’s position is built over a period of time in a customer’s mind. Brands have taken long period of time to get a dominate market share. When brands are launched, they do not get overnight success but take time to reach a dominate market position. Maggi noodles in Indian market took time to establish itself as a brand leader in the category.

Clarity :

Clarity A brand’s position should have clarity so that it will be easy to communicate and quick to comprehend. Any level of difficulty in the process of communication and comprehension suggests that the brand’s position is fuzzy in nature and of lesser value to the brand. Clarity in elements of brands communication facilitates the consumers information processing and comprehension and helps in building a strong position in the market.

Courage:

Courage Adopting a strong position requires clarity of vision and courage for the brand manager. It is much easier to have a generic positioning and appeal to everyone in the market but as discussed it does not build a strong position. So a brand manager needs to have courage to believe that a strong position is a strategic intent for the brand.

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