 S.No. - 2/1  LECTURE TITLE – BASIC CONCEPTS OF MARKETING 1

Basic concepts of Marketing ICRI,Mumbai

 Selling?  Advertising?  Promotions?  Making products available in stores?  Maintaining inventories?  All of the above, plus much more! 3

 GOOD MARKETING IS NO ACCIDENT ◦ A RESULT OF CAREFUL PLANNING AND EXECUTION  BOTH “ART” AND “SCIENCE” ◦ FORMULATED SIDE v/s CREATIVE SIDE  EASY TO LEARN FORMULATED ASPECTS ◦ CREATIVE ASPECT IS YOUR INBORN CAPABILITY/ SKILL

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 Position of marketing personnel in an organisation  Marketing is tricky – achilles’ heel of many companies  Short term sales driven view is always risky  Skillful marketing is a never ending pursuit  Making the right decisions is difficult- ◦ What features to design in a new product ◦ What prices to offer ◦ Where to sell products ◦ How much to spend on ad or sales ◦ Exact wording or colours for new packaging

 Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services to create exchanges that satisfy individual and organizational goals  American Marketing Association 7

Marketing management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value. 8

 MANAGERIAL- “ART OF SELLING PRODUCTS”. ◦ SELLING IS ONLY TIP OF MARKETING ICEBERG.  PETER DRUCKER – “There will always be need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed then is to make the product or service available.”

10 Industry (a collection of sellers) Market (a collection of Buyers) Goods/services Money Communication Information

11 Difference Between - Sales & Marketing ? Sales trying to get the customer to want what the company produces Marketing trying to get the company produce what the customer wants

 Marketing is the sum of all activities that take you to a sales outlet. After that sales takes over.  Marketing is all about creating a pull, sales is all about push.  Marketing is all about managing the four P’s –  product  price  place  promotion 12

 Based on :  Needs, Wants, Desires / demand  Products, Utility, Value & Satisfaction  Exchange, Transactions & Relationships  Markets, Marketing & Marketers. 13

14 Needs, wants demands Markets Marketing & Marketers Utility, Value & Satisfaction Xchange, Transaction Relationships Products

 First create value for customer and then capture value from customers 15 Understand market place and customer needs and wants Design a customer driven marketing strategy Construct an integrated marketing program that delivers superiorvalue Build profitable relationship and create customer delight Capture value from customer in return

 Customer’s needs, wants and demands  Market offerings- product/ services/ experiences  Customer value and satisfaction  Exchanges and relations  Markets 16

 Need –  food ( is a must )  Want –  Pizza, Burger, French fry's ( translation of a need as per our experience ) 17

 Demand –  Burger ( translation of a want as per our willingness and ability to buy )  Desire –  Have a Burger in a five star hotel 18

 The most basic concept underlying marketing is that of human needs.  Human needs are states of felt deprivation.  They include basic. - physical needs for food - Clothing - Warmth - Safety 19

 Wants are the form human need take as they are shaped by culture and individual personality.  An American needs food but want a Big Mac, French fries, and a soft drink 20

 Want become demands  Given their wants and resources, people demand products with benefits that add up to the most value and satisfaction.  Backed by capacity to pay 21

 Goods  Services  Events  Experiences  Personalities  Place  Organizations  Properties  Information  Ideas and concepts 22

 Value - the value or benefits the customers gain from using the product versus the cost of obtaining the product.  Satisfaction - Based on a comparison of performance and expectations. ◦ Performance > Expectations => Satisfaction ◦ Performance Dissatisfaction 23

 Exchange– the act of obtaining a desired object from someone by offering something in return – ◦ a response to some market offerings, ◦ may be more than buying or trading the product.  E.g. a candidate looking for votes/  church wanting a membership/  orchestra wanting audience,  social action group wants idea acceptance  Exchange Relationship with target audience ◦ with goal to retain customers and grow their business with company-  superior customer value 24

 A set of actual and potential buyers. Sharing a particular need or want  Managing markets- to bring about profitable customer relationships. ◦ Search buyers…. Identify needs….design good market offerings….set price for them…..promote them….store and deliver them. 25

 Product development  Research  Communication  Distribution  Pricing  service 26

 Selecting customer to serve- segmentation/ target marketing  Choosing a value proposition  Marketing management orientation ◦ Production concept ◦ Product concept ◦ Selling concept ◦ Marketing concept ◦ Societal marketing concept 27

 Market segmentation  Target marketing  Demarketing  Customer Management &  Demand Management 28

 How company will serve its targeted customers  Differentiation- differentiate one brand from other  Position  A set of benefits and values it promises to deliver to customers to satisfy their needs  Companies must design strong value propositions 29

 Philosophies to guide marketing strategies/ ◦ weightage given to customers/ organisations/ society  Five alternative concepts for marketing strategies ◦ Production Concept ◦ Product concept ◦ Selling Concept ◦ Marketing Concept ◦ Societal Marketing 30

 Marketing Myopia- attention to features of products rather than benefits and experiences 31

 Deliver actual value to target customer  Transforming marketing strategy into action  Marketing Mix – set of marketing tools  4Ps –  4Cs  Comprehensive & Integrated marketing plan that communicates and delivers intended value to chosen customers 32

33 Marketing Mix Product Price Promotion Place Customer Solution Customer Cost Communication Convenience

As a priority, we must bring to our customers “WHAT THEY NEED” We must be in a position to UNDERSTAND their problems Or in a new situation to give them a chance to AVOID the problems 34

Who are your competitors? What are their strengths and weaknesses? What have been their strategies? How are they likely to respond to your Marketing plan? 35

 CRM  Relationship building blocks  CR levels and tools  Partner relationship management 36

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

 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 ecosystem  Understanding both the needs and the ecosystem is the starting point of a long term relationship 38

 Value = Benefit / Cost  Benefit = Functional Benefit + Emotional Benefit  Cost = Monetary Cost + Time Cost + Energy Cost 39

◦ Customer Value- customer perceived value (difference between all benefits and all costs) ◦ Satisfaction- depends on perceived performance over expectations ◦ Delight- promise only what you can deliver and then deliver more than what is promised. 40

 Basic Relationship  Full Relationship  Intermediate  Frequency Marketing programme  Club marketing programme  Structural ties- financial and social benefits 41

 Creating customer loyalty and retention ◦ customer life time value  Growing share of customers  Building customer equity  Building right relationship with right customer  Customer relationship group 42

 CEO must own marketing function  Marketing dept must start small and flat and stay small and flat  Get face to face with people who matter- the customers  Use market research cautiously  Hire only passionate missionaries, not marketers  Love and respect customers as individuals, not as numbers on a spreadsheet  Create a community of consumers  Rethink the marketing mix  Celebrate common sense and compete with larger competitors through fresh and different ideas  Be true to the Brand 43

Thank You 44