MARKETING MANAGEMENT Chithambar Gupta V Associate Professor Reva Institute of Technology & Management Bangalore MODULE 1 - INTRODUCTION

Module Questions Why is marketing important? What is the scope of marketing? What are some fundamental marketing concepts? How has marketing management changed? What are the tasks necessary for successful marketing management?

What is Marketing? Marketing deals with identifying and meeting human and social needs. More simply: Marketing is the delivery of customer satisfaction at a profit. “Meeting needs profitably” Marketing: Managing Profitable Customer Relationships

What is Marketing? Marketing is about managing profitable customer relationships Attracting new customers Retaining and growing current customers

UNDERSTANDING MARKETING Process of finding out customer needs and serving those needs profitably Profit is a legitimate goal of a business organization Essence of marketing is providing desired value to customers Marketing should be considered a central business function

THE MARKETING CONCEPT All activities are focused upon providing customer satisfaction Every employee in an organization is a marketer Marketing is both an “art” & a “science” Marketing is often defined as “art of selling products” But selling is only the tip of the marketing iceberg.

Differences between Marketing & Selling S.N o MarketingSelling 1Focuses on customer needsFocuses on seller needs 2Begins before ProductionBegins after production 3Continues after saleComes to an end with sale 4 A comprehensive term in terms of meaning A narrow term in terms of meaning 5Philosophy of businessRoutine day to day physical process

S.N o MarketingSelling 6 Profits through customer satisfaction Profits through sales volume 7Let the seller be awareLet the buyer be aware 8Integrated approachFragmented approach 9Long-term perspectiveShort-term perspective 10Customer first then ProductProduct first then Customer Differences between Marketing & Selling

The Selling and Marketing Concepts Contrasted

What is Marketing? Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. - Philip Kotler

Simple Marketing System Industry (a collection of sellers) Market (a collection of Buyers) Goods/services Money Communication Information

Core Marketing Concepts Products and Services Value, satisfaction, and quality Needs, wants, and demands Exchange, transactions, and relationships Markets Core Marketing Concepts Core Marketing Concepts

Understanding the Marketplace Needs, wants, and demands Marketing offers: including products, services and experiences Value and satisfaction Exchange, transactions and relationships Markets Core Concepts Goal 2: Identify the five core marketplace concepts.

Needs, Wants & Demand Need Basic Human requirements State of felt deprivation E.g.: Food, air, water, clothing etc Wants Needs become wants when they are directed to specific objects that might satisfy the need. The form of needs as shaped by culture and the individual E.g.: Food in India is rice, in US it is Burger Demands Wants which are backed by buying power

Understanding the Marketplace Needs, wants, and demands Marketing offers: including products, services and experiences Value and satisfaction Exchange, transactions and relationships Markets Core Concepts Marketing offer Combination of products, services, information or experiences that satisfy a need or want Offer may include services, activities, people, places, information or ideas

Understanding the Marketplace Needs, wants, and demands Marketing offers: including products, services and experiences Value and satisfaction Exchange, transactions and relationships Markets Value Customers form expectations regarding value Marketers must deliver value to consumers Satisfaction A satisfied customer will buy again and tell others about their good experience Core Concepts

Understanding the Marketplace Needs, wants, and demands Marketing offers: including products, services and experiences Value and satisfaction Exchange, transactions and relationships Markets Exchange The act of obtaining a desired object from someone by offering something in return One exchange is not the goal, relationships with several exchanges are the goal Relationships are built through delivering value and satisfaction Core Concepts

Understanding the Marketplace Needs, wants, and demands Marketing offers: including products, services and experiences Value and satisfaction Exchange, transactions and relationships Markets Market Set of actual and potential buyers of a product Marketers seek buyers that are profitable Core Concepts

Exchange Exchange is the core concept of marketing The process of obtaining a desired product from someone by offering something in return Exchange is a value-creating process because it normally leaves both parties better off

For an exchange to occur…. There are at least two parties. Each party has something that might be of value to the other party. Each party is capable of communication and delivery. Each party is free to reject the exchange offer. Each party believes it is appropriate or desirable to deal with the other party.

Modern Marketing System Suppliers End User Market End User Market Marketing Intermediaries Marketing Intermediaries Competitors Company (Marketer) Company (Marketer) Environment

What is Marketing Management? 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.

Selecting Customers and Creating Value Customer Management What customers will we serve? Marketers select customers that can be served profitably Value Proposition How can we serve these customers best? Includes the set of benefits or values a company promises to deliver to consumers to satisfy their needs

What is Marketed? Goods Services Events & Experiences Persons Places & Properties Organizations Information Ideas

What is Marketed? Goods (tangible) Services (intangible) Events (time based— trade shows) and Experiences (Walt Disney World’s Magic kingdom) Persons (Artists, Musicians, CEO, Physicians) Places (Cities, States, Regions, Nations) and Properties (Intangible rights of ownership of real estate or financial properties) Organizations (Universities, Museums, Performing Arts Organization) Information (Books, Schools, Magazines) Ideas (Family Planning awareness)

Key Customer Markets Consumer markets (personal consumption) Business markets (resale or used to produce other products or services) Global markets (international) Nonprofit/Government markets (Churches, Universities, Charitable Organizations, Government Agencies)

Key Customer Markets Consumer Markets Business Markets Global Markets Nonprofit/ Government Markets

Structure of Flows in a Modern Exchange Economy

Demand States Nonexistent Latent Declining Irregular Full UnwholesomeOverfull Negative

Demand States Negative (dislike product and may even pay a price to avoid it) Nonexistent (unaware of or uninterested in the product) Latent (need that cannot be satisfied by existing product) Declining (buy the product less frequently or not at all) Irregular (purchases vary on a seasonal, monthly, weekly, daily, or even hourly basis) Unwholesome (product that have undesirable social consequences) Full (adequately buying all products put into the marketplace) Overfull (more consumers would like to buy the product that can be satisfied)

Company Orientations Production SellingMarketing Product

Production Concept Product Concept Selling Concept Marketing Concept Societal Marketing Concept Consumers favor products that are available and highly affordable. Improve production and distribution. Consumers favor products that offer the most quality, performance, and innovative features. Consumers will buy products only if the company promotes/ sells these products. Focuses on needs/ wants of target markets & delivering satisfaction better than competitors. Focuses on needs/ wants of target markets & delivering superior value. Marketing Management Philosophies

PRODUCTION CONCEPT Inward looking orientation Management becomes cost focused Objective is cost reduction Business mission is focused on current production capabilities Manufacture products and aggressively sell them to customers

SELLING CONCEPT Product or service is not designed and made according to customer’s requirements Customer has to be persuaded to believe that the product or the service meets his requirements Customer dissatisfied and bad-mouths company Marketing makes selling redundant

PRODUCT CONCEPT Companies become centered on constantly improving the product Myopic focus on the product No attention on the other ways in which customers can fulfill their needs – MARKETING MYOPIA Customer does not buy a product, he buys an offering that fulfills his needs

Holistic Marketing Dimensions

Integrated Marketing Transforms the marketing strategy into action Includes the marketing mix and the 4P’s of marketing Product Price Place Promotion

The Four P’s

Marketing Mix and the Customer Four Ps Product Price Place Promotion Four Cs Customer solution Customer cost Convenience Communication

Marketing-Mix Strategy

Internal Marketing Internal marketing is the task of hiring, training, and motivating able employees who want to serve customers well.

Societal Marketing Concept Society (Human Welfare ) Society (Human Welfare ) Consumers (Wants) Consumers (Wants) Company (Profits) Company (Profits) Societal Marketing Concept Societal Marketing Concept

Performance Marketing Financial Accountability Social Responsibility Marketing Social Initiatives Corporate social marketing Cause marketing Cause-related marketing Corporate philanthropy Corporate community involvement Socially responsible business practices

Evolving Views of Marketing’s Role a. Marketing as an equal function Finance Production Marketing Human resources b. Marketing as a more important function Finance Human resources Marketing Production

Evolving Views of Marketing’s Role c. Marketing as the major function Marketing Finance Human resources Production d. The customer as the controlling factor Customer Human resources Finance Production Marketing

Evolving Views of Marketing’s Role e. The customer as the controlling function and marketing as the integrative function Customer Marketing Production Human resources Finance

Customers Front-line people Middle Management Top Management Traditional Organization Chart

Customer-Oriented Organization Chart Customers Front-line people Middle management Top manage- ment Customers

Emerging Challenges Emerging Challenges Nonprofit Marketing New Marketing Landscape & Information Technology Ethical Concerns Globalization Changing World Economy New Marketing Challenges

The marketplace isn’t what it used to be… Changing technology Globalization Deregulation Privatization Empowerment Customization Convergence Disintermediation

New Consumer Capabilities A substantial increase in buying power A greater variety of available goods and services A great amount of information about practically anything Greater ease in interacting and placing and receiving orders An ability to compare notes on products and services An amplified voice to influence public opinion

Quote by Mahatma Gandhi on Customer "A customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption in our work - he is the purpose of it. We are not doing him a favour by serving him. He is doing us a favour by giving us the opportunity to serve him. - Mahatma Gandhi"

The Marketing Process A Five-Step Process 1.Understand the marketplace and customer needs and wants 2.Design a customer-driven marketing strategy 3.Construct a marketing program that delivers superior value 4.Build profitable relationships and create customer delight 5.Capture value from customers to create profits and customer quality

What is Marketing The process of building profitable customer relationships by creating value for customers and capturing value in return

Marketing Debate Does Marketing Create or Satisfy Needs?