Marketing Management Philip Kotler Kevin Lane Keller Abraham Koshy Mithileshwar Jha 12e/13e Pearson Education

What is Marketing??? Some definitions:- “ Identifying and meeting human and social needs profitably” American Marketing Association defines it as “ The organisational function and set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organisation and its stakeholders”

Marketing definitions “Marketing is the 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”

Exchange and transactions Exchange is the process of obtaining a desired product from someone by offering something in return Conditions: There should be two parties Each has something that the other values Each party is capable of communication Each party is free to accept or reject the exchange offer Each believes that it is desirable to deal with the other party Two parties negotiating are known as engaged in exchange, once an agreement is reached, we say a transaction take place.

What is marketed?? Goods: TV, Mobiles Services: Banking, Insurance Events: Vibrant Gujarat Experiences: EsselWorld Person: Amitabh Bachhan Places: Kerala, Goa Properties: Amby Valley Organisations: Reliance Power Information: Yellow pages Ideas: CRY, Eye donation, Blood donation

Who is who??? A marketeer is someone who seeks a response ( purchase) from the other party The other party is known as prospect

Types of demand Eight states of demand: Negative demand: Consumer dislike the product and may pay a price to avoid it Nonexistent demand: Consumer are unaware or disinterested in the product Latent demand: Consumers have a need which cannot be satisfied by current products Declining demand: Consumer purchase less frequently/do not purchase at all Irregular demand: Consumers purchase on a seasonal, monthly, weekly etc basis Full demand: Product is adequately bought by consumer Overfull demand: More consumers want the product that can be satisfied Unwholesome demand: Consumers want products that have bad social consequences

Markets and Industry Figure: Communication Goods/Services Money Information Industry (A collection of sellers) Market (A collection of buyers)

Type of Markets Consumer markets Business markets Global markets Nonprofit and Government markets

Markets: New concepts Market place and Market space: Place is physical while space is digital Metamarkets : Cluster of complementary products and services that are closely related in the minds of consumers but are spread across a diverse set of industries

Company Orientation towards the market place Production concept: Principle: Consumers will prefer products that are widely available and inexpensive These business concentrate on high production efficiency, low costs and mass distribution Example: Sanghi cement

Company Orientation towards the market place 2. Product concept: Principle: Consumers will favour products that offer the most quality, performance or innovative features These organisations focus on making superior products and improving over time Example: Sony Flip: Leads to Marketing Myopia – shortsightedness of the marketer – falling in love with one’s own product rather that understanding consumer needs

Company Orientation towards the market place 3. The Selling concept: Principle: The consumer, if left alone will not purchase, so the organisation has to aggressively sell it to the consumer. Insurance companies do it!!! Such firms want to sell what they make rather than make what the market wants – risky business!!!

Company Orientation towards the market place 4. Marketing concept: Principle: The key to organisational goals consists of the company being more effective than competitors in creating, delivering and communicating superior customer value to its chosen target markets

diFFerence between seLLing and marKeting Selling focuses on needs of seller while marketing focuses on needs of buyer Selling needs with the seller’s requirement to convert his product to cash while marketing deals with satisfying the needs of customer by the means of product

Company Orientation towards the market place 5. The holistic marketing concept: It is based on the development, design and implementation of marketing programs, processes and activities that recognises their breadth and interdependencies

Holistic marketing It has four components: Relationship marketing Integrated marketing Internal marketing Social responsibility marketing

Relationship marketing It aims to build mutually satisfying long term relationships with key parties – customers, suppliers, distributors and other marketing partners – in order to earn retain their business Relationship marketing consists of CRM: Customer relationship management PRM: Partner relationship management The ultimate outcome of relationship marketing is a unique company called a marketing network It consists of company and its supporting stakeholders(customers, employees, suppliers, distributors, retailers, ad agencies)

Integrated Marketing The marketeer’s task is to devise marketing activities and assemble fully integrated marketing programs to create, communicate and deliver value for consumers. Here is where is the marketing mix comes in! -defined as the set of tools that firm uses to pursue its marketing objectives

Marketing Mix McCarthy called it the 4 P’s Product – Variety, Quality, Design, Features, Brand name, Warranties Price – List price, Discounts, Credit period Place – Channels, Transport, Coverage, Locations Promotion – Sales promotion, Advertising, Sales force, Public relations, Direct marketing

4 Ps Product = Customer solution Price = Customer cost Place = Convenience Promotion= Communication

Internal Marketing Internal marketing is the task of hiring, training and motivating employees to serve consumers well. This takes place at two levels: Various marketing functions must work together Marketing must be embraced by other departments as well

Social Responsibility marketing Understanding broader concerns and the ethical, environmental, legal and social context of marketing activities and programs Societal marketing concept: It states that the organisation’s task is to determine the needs, wants and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumer’s and society’s well being.

Core concepts of marketing Needs : Basic human requirements – hunger, thirst Wants : Specific objects that satisfy needs – Pepsi for thirst and Pizza for hunger Demands: wants for specific products backed by ability to buy and willingness to buy

Needs!!!!! 1.Stated needs 2. Real needs 3. Unstated needs 4. Delight needs 5. Secret needs

S-T-P Segmentation Targeting of markets Positioning

Value and Satisfaction Value is a combination of quality, service and price Value = Consumer Benefit / Price paid Satisfaction is the consumer’s judgment of the product’s perceived performance Actual = Expected  Satisfaction Actual < Expected  Dissatisfaction Actual > Expected  Delight

Marketing Channels Three types 1. Communication channels 2. Distribution channels 3. Service channels

Marketing Environment Task environment – company, suppliers, distributors and customers Broad environment – demographic, economic, physical, technological, political, legal, socio-cultural