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Unit 1 Mktg Intro_Mix_Envi_Seg_CB.pptx

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Madhusudan Rao Datrika
Madhusudan Rao Datrika

This document provides an overview of key marketing concepts for the 21st century. It discusses how the new digital economy has empowered both consumers and companies through greater information access and communication capabilities. The document defines marketing as managing exchanges between organizations and customers to meet mutual objectives. It also distinguishes marketing from selling, noting marketing focuses on customer needs while selling prioritizes company goals. Finally, the document outlines different company orientations towards marketing, including the production, product, selling, and marketing concepts.

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MARKETING MANAGEMENT Unit-1 Defining Marketing for the 21st Century
MARKETING MANAGEMENT In this chapter we will address the following questions:  What is the new economy like?  What are the tasks of marketing?  What are the major concepts and tools of marketing?  What orientations do companies exhibit in the marketplace?  How are companies responding to the new challenges?
Old Economy VS New Economy The old economy is based on the Industrial Revolution and on managing manufacturing industries WHILE … The new economy is based on the Digital Revolution and the management of information.
The New Economy placed the following capabilities in the hands of consumer:  Substantial increase in buying power  Greater variety of available goods and services  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
AND placed the following capabilities in the hands of companies: Operate powerful new information and sales channels  Collect richer information about markets, customers, prospects, and competitors  Speed up internal communication among employees  Have two-way communications with customers and prospects  Send promotional tools easily and quickly  Able to customize offerings  Improve purchasing, recruiting, training and internal and external communication.  Maintain cost saving while improving accuracy and service quality.
Marketing and Exchange • What is marketing? 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
Selling is only the tip of the iceberg “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 is to make the product or service available.” Peter Drucker
Selling (Old concept) Marketing (Modern concept) 1. Product enjoys the supreme importance. 2. Emphasis is on corporate objectives and needs. 3. Company-oriented selling efforts. 4. Goods are already produced and management sells them on profit through intensive advertising. 5. Selling aims at short-term objectives as it is only a tactical and routine activity. 6. Top priority is given to sales volume maximization leading to profit maximization. 1. Customer enjoys the unique importance. 2. Emphasis is on customer’s needs 3. Market-oriented selling efforts. 4. Customer’s demand determines production. 5. Marketing aims at long-term objectives. It has philosophical and strategic implications. 6. Top priority is given to profitable volume of sales and market share at fair prices and reasonable risk. Distinction between Marketing and Selling
Definition: “Marketing Management is the process of ascertaining consumer needs, converting them into products or services to the final consumer or user to satisfy such needs and wants of specific customer segment or segments with emphasis on profitability ensuring the optimum of the services available to the organization.” - Dr. Rustom S. Davar Definition: “Sales Management is planning, direction and control of selling activities of a business unit including recruiting, selecting, training, equipping, assigning, routing, supervising, paying and motivating as these tasks apply to the sales force”. - American Marketing Association {Practically marketer has to do FAB (Features, Advantages and Benefits) analysis and sell, which is easier and effectual for results}
What is Exchanged in Marketing? Goods Services Events & Experiences Persons Places & Properties Organizations Information Ideas
4 Types of Markets 1. Consumer Market: (consumption) 2. Business Markets: (saving/resell) 3. Global Markets: (different offering mix) 4. Nonprofit and Governmental Market: (bids)
Marketing Concepts and Tools  Market: a collection of buyers and sellers  Marketplace: a physical market (store)  Marketspace: a digital market (Internet: e.g., www.secondlife.com)  Metamarket: markets involving closely-related products and services (e.g., www.edmunds.com)  Marketer and Prospect: A marketer is someone seeking a response from another party, called the prospect.
A Simple Marketing System
Structure of Flows in a Modern Exchange Economy
Marketing Concepts and Tools  Needs: the basic human requirements  Wants: specific objects that might satisfy the need  Demand: wants for specific products backed by an ability to pay. Examples: An American needs food but wants a hamburger, French fries and soft drink. Many people want a Mercedes, only a few are able and willing to buy one.
Marketing Debate Does Marketers Create or Satisfy Needs?
Marketing Concepts and Tools  Product: a value proposition  Offering: intangible value proposition (a combination of products, services, information and experiences (Volvo)  Brand: is an offering from a know source Examples: McDonald Lexus
Only the best is good enough for Lexus customers
Marketing Concepts and Tools Value is a ratio between what customer gets and what he gives Value = Benefits/Costs How to increase value? Raise benefits Reduce costs Raise benefits and reduce costs Raise benefits by more than the raise of costs Lower benefits by less than the reduction of costs
Marketing Concepts and Tools  Exchange: a process of obtaining a product/service from someone by offering something For exchange to occur, there must be: • Two parties • Each with something of value to the other • Capable of communication and delivery • Free to accept/reject the offer • Agreement to terms Example: Caterpillar
Marketing Concepts and Tools  Transaction: a trade of values between two or more parties. Does Transaction differs from Transfer
Marketing Concepts and Tools  Relationship: building mutually satisfying long-term relations with key parties (customers, suppliers, distributor) in order to earn and retain their business.  Network: building mutually profitable business relationships between the company and its supporting stakeholders.
Marketing Concepts and Tools  Marketing channels: a way/mean to reach target market. Three kinds of marketing channels: Communication channels Distribution channels Service channels
Marketing Concepts and Tools  Supply Chain: longer channel stretching from raw materials to components to final products that are carried to final buyers.  Competition: all actual and potential rival offerings and substitutes that a buyer might consider.
Marketing Concepts and Tools Four (4) levels of competition: 1. Brand competition: A company sees its competitors as other companies offering similar products and services to the same customers at similar prices. 2. Industry competition: A company sees its competitors as all companies making the same product or class of products. 3. Form competition: A company sees its competitors as all companies manufacturing products that supply the same services. 4. Generic competition: A company sees its competitors as all companies that compete for the same consumer dollars. (Example: Volkswagen)
Marketing Concepts and Tools  Marketing Environment: actors that impact the company’s offerings (task & broad environment).  Marketing Program: a numerous decisions on the mix of marketing tools to use.  Marketing Mix: a set of marketing tools the firm uses to pursue its marketing objectives in the target market.
The Four Ps
The Four Ps The Four Cs Product Price Promotion Place Customer Solution Communication Conven- ience Marketing Mix
Marketing-Mix Strategy
Marketing Management •Marketing Management (Kotler): is the analysis, planning, implementation, and control of marketing programs designed to create, build, and maintain mutually beneficial exchanges and relationships with target markets for the purpose of achieving organizational objectives.
Company Orientations to the Marketplace (Marketing Management Philosophies) 1. Production concept: assumes consumers favor those products that are widely available and affordable. (Focus: wide distribution; high volume). 2. Product concept: assumes consumers will favor those products that offer the most quality, performance, and features. (Focus: Superior product)
Company Orientations to the Marketplace, cont. 3. Selling concept: assumes that consumers will either buy or not enough of the organizations’ products unless the organization makes a substantial effort to stimulate the customer’s interest in the product. (Focus: needs of the seller) The purpose of marketing is to sell more stuff to more people more often for more money in order to make more profit Coca-Cola’s former Vice president
Company Orientations to the Marketplace, cont. 4. Marketing concept: holds that the key to achieving organizational goals consists in determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors. (Focus: different needs of buyers)
Marketing and Selling Concepts Contrasted Factory Products Selling and Promoting e.g., Profits through Volume (a) The Selling Concept Starting Point Focus Means Example Ends Market Customer Needs Integrated Marketing e.g., Profits through Satisfaction (b) The Marketing Concept
Theodore Levitt’s “Marketing Myopia,” cont. •What is the difference between marketing and selling? •“The difference between marketing and selling is more than semantic. Selling focuses on the needs of the seller, marketing on the needs of the buyer. Selling is preoccupied with the seller’s need to convert the product into cash; marketing with the idea of satisfying the need of the customer ….”
Marketing Concept Four Pillar 1. Target Market: tailored marketing programs 2. Customer Needs:  Giving customer what they need is not enough; companies must help customers learn what they want.  Stated, Real, Unstated, Delight & Secret Needs. (Inexpensive car example)  Responsive, Anticipated & Creative Marketer.  Market-driving firm VS Market-driven firm.  Make and sell VS Sense and respond Philosophy.  Why it’s important to satisfy target customers? (Customer retention)
Marketing Concept Four Pillar 3. Integrated Marketing: all company’s departments work together to serve the customer’s interests. a. External marketing: directed at people outside the company. b. Internal marketing: the task of hiring, training, and motivating able employees who want to serve customers well. Which one is more important? 4. Profitability
Traditional Organization Chart Customers Front-line people Middle Management Top Management
Modern Customer-Oriented Organization Chart Customers Front-line people Middle management Top manage- ment
What makes companies adopt marketing concept? 1. Sales decline 2. Slow growth 3. Changing buying patterns 4. Increasing competition 5. Increasing marketing expenditures
Company Orientations to the Marketplace, cont. 5. The customer concept: • Customer is the lifeblood of any company • Customer is the King
The Customer Concept
Company Orientations to the Marketplace, cont. 6. The societal marketing concept: to determine the needs, wants, and interests of target markets and to deliver the desired satisfaction more effectively and efficiently than competitors in a way that preserves or enhances the consumer’s and the society’s well-being.
Societal Marketing Concept Dalrymple & Parsons/Marketing Management 7th edition: Chapter 1 16 Marketing Managers Must Marketing Managers Must Balance Balance Promote sale of goods and services Long-term needs for a safe and healthy environment Profits Public Interest
How are companies responding to the new challenges? 1. Reengineering 2. Outsourcing 3. E-Commerce 4. Benchmarking 5. Alliances 6. Partner-Suppliers 7. Market-central 8. Global and local 9. Decentralization
Developing the Marketing Mix Program • Product • Price • Place (Marketing Channels) • Promotion Selecting the target market and designing the marketing mix go hand-in- hand
Extended- Marketing Mix
Unit 1 Mktg Intro_Mix_Envi_Seg_CB.pptx
7Ps & 7Cs The 7 Ps The 7 Cs Organisation Facing Customer Facing Product = Customer/ Consumer Price = Cost Place = Convenience Promotion = Communication People = Caring Processes = Co-ordinated Physical Evidence = Confirmation
Marketing Management MARKETING ENVIRONMENT
Definition “A company’s marketing environment consists of the actors and forces outside marketing that affect management’s ability to build and maintain successful relationships with target customers.” ---- Philip Kotler
Definition and Concepts • The microenvironment consists of the following actors close to the company that affect its ability to serve its customers: (1) The company (2) The suppliers (3) The marketing intermediaries (4) The customer markets (5) The competitors (6) The public. • The macro environment consists of the following larger societal forces that affect the microenvironment: PESTEL (1) Political (2) Economic (3) Demographic /Socio- Cultural (4) Technological (5) Political (6) Legal (7) Ecological/ Natural
Microenvironment Macro environment
Opportunities Examples of Opportunities Posed by Marketing Environment in India 1. The New Economic Policies of the Government of India in general. 2. The New Industrial Policy. 3. Liberalisation of industrial licensing. 4. Foreign Exchange Regulation Act (FERA) and Monopolies and Restrictive Trade Practices Act (MRTP) liberalization. 5. Curtailment of and disinvestments in public sector. 6. The New Trade Policy – lowering of import tariffs, abolition of import licenses, convertibility of rupee, globalisation, etc. 7. Fiscal and monetary reforms, banking sector reforms, capital market reforms. 8. Removal or phasing out of subsidies. 9. Encouragement to foreign direct investment (FDI). 10. Dismantling of price controls and introduction of market-driven price environment.
Threats Examples of Threats Posed By Marketing Environment In India 1. Entry of Multi-National Companies (MNCs) into the Indian market on a large scale increases the competition for products and services. 2. ‘Survival of the fittest’ rule forces many weaker and small-scale companies to close down due to non-viability. 3. Big players start buying smaller players through mergers and acquisitions. 4. Removal of subsidy affects profitability and viability of many industries. (Fertiliser industry is one such affected sector where units had to close down or stop products of certain products). 5. Banks and insurance sector came under competitive environment and were compelled to operate viably, at par with the private sector. 6. In general, many industrial units across India faced a destabilization consequent to the economic reforms. Their markets, market shares and profits came under severe pressure and viability became a big question.
Marketing Environment Company Demographic Economic Natural Technological Political Cultural Company Customers Intermediaries Suppliers Competitors Publics
• Internal environment (SW) • External environment (OT) • SWOT analysis (Strength, Weakness, Opportunity, Threat) – TOWS Matrix • PESTLE analysis
SWOT Analysis ….
The Micro Environment Company Customers Publics Suppliers Competitors Intermediaries Forces Affecting a Company’s Ability to Serve Customers
Customer Markets Company Consumer Markets International Markets Government Markets Business Markets Reseller Markets
The Macro Environment Demographic Technological Cultural Economic Political Natural Forces that Shape Opportunities and Pose Threats to a Company
PEST(LE) Analysis •Political factors •Economic factors •Socio-cultural factors •Technological factors •Legal factors •Ecological factors
Political Environment Greater Concern for Ethics Increased Legislation Changing Enforcement Key Trends in the Political Environment
Economic Environment Changes in Consumer Spending Patterns Economic Development Changes in Income Key Economic Concerns for Marketers
Economic factors •Inflation •Employment •Disposable income •Business cycles •Energy availability and cost
Cultural Environment Of Organizations Of Nature Of Oneself Of Society Of the Universe Of Others Views That Express Values
Socio-Cultural factors •Demographics •Distribution of income •Social mobility •Lifestyle changes •Consumerism •Levels of education
Natural Environment Factors Affecting the Natural Environment More Government Intervention Shortages of Raw Material Increased Costs of Energy Higher Pollution Levels
Ecological Environment •Environmental Management Perspective –Taking a proactive approach to managing the micro environment and the macro environment to affect changes that are favorable for the company. –How? –Hire lobbyists, run “advertorials”, file law suits and complaints, and form agreements.
SEGMENTATION PROCESS
Positioning through marketing mix strategies Selecting market to target Determining market segmentation Identify markets with unfulfilled needs Selecting a target market(s) Determining market segmentation Identifying markets with unfulfilled needs Steps in Market Segmentation, Targeting, and Positioning © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Selecting & Relating to Customers • Identify factors to segment market • Determine potential of each segment Objective: identify & understand customer characteristics Segmentation
Identifying Markets •What is a market? PEOPLE BUT - not just ANY people, they have to have • Willingness to buy • Purchasing power (money) • Authority to buy, a specific product •Consumer Markets and Industrial Markets
Bases for Market Segmentation
Unit 1 Mktg Intro_Mix_Envi_Seg_CB.pptx
Unit 1 Mktg Intro_Mix_Envi_Seg_CB.pptx
Unit 1 Mktg Intro_Mix_Envi_Seg_CB.pptx
Unit 1 Mktg Intro_Mix_Envi_Seg_CB.pptx
Unit 1 Mktg Intro_Mix_Envi_Seg_CB.pptx
Reasons to Use Market Segmentation Reasons why firms segment markets
Unit 1 Mktg Intro_Mix_Envi_Seg_CB.pptx
Unit 1 Mktg Intro_Mix_Envi_Seg_CB.pptx
The main criteria for evaluating market segments
Unit 1 Mktg Intro_Mix_Envi_Seg_CB.pptx
Unit 1 Mktg Intro_Mix_Envi_Seg_CB.pptx
What is Benefit Segmentation?
As implied by the name, benefit segmentation is splitting up the market based upon the key benefits and needs sought by purchasing consumers. As a result, benefit segmentation is a very consumer-centric approach as it identifies the core product needs of the consumers.
Unit 1 Mktg Intro_Mix_Envi_Seg_CB.pptx
Selecting & Relating to Customers • Criteria for selection • Segment strategy Objective: Selecting customers & allocating resources Segmentation Target Marketing
Selecting a Target Market Determining which segments to target •Sales potential •Growth opportunities •Competition •Ability to serve the segment
Target Marketing Strategies • Mass Market • One size fits all  Well defined mkts  Different approach for each  Single mkt  One approach Undifferentiated Differentiated Concentrated
Selecting & Relating to Customers • Understand customers • Determine image Objective: Establish positive image relative to competitors Segmentation Target Marketing Positioning
Positioning Creating a product image or identity in the minds of their target market relative to competitive products.
Develop Product Positioning
Simple Preparation Involved Preparation Healthy Unhealthy Beef Pork Tuna Chicken Turkey Fresh Fish Bacon Hot Dogs Develop Product Positioning contd...
How do these ads demonstrate that the companies understand the customer?
Which segmentation variable is employed in this ad? Within that variable, which category does the ad target.
Unit 1 Mktg Intro_Mix_Envi_Seg_CB.pptx

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Unit 1 Mktg Intro_Mix_Envi_Seg_CB.pptx

  • 2. MARKETING MANAGEMENT In this chapter we will address the following questions:  What is the new economy like?  What are the tasks of marketing?  What are the major concepts and tools of marketing?  What orientations do companies exhibit in the marketplace?  How are companies responding to the new challenges?
  • 3. Old Economy VS New Economy The old economy is based on the Industrial Revolution and on managing manufacturing industries WHILE … The new economy is based on the Digital Revolution and the management of information.
  • 4. The New Economy placed the following capabilities in the hands of consumer:  Substantial increase in buying power  Greater variety of available goods and services  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
  • 5. AND placed the following capabilities in the hands of companies: Operate powerful new information and sales channels  Collect richer information about markets, customers, prospects, and competitors  Speed up internal communication among employees  Have two-way communications with customers and prospects  Send promotional tools easily and quickly  Able to customize offerings  Improve purchasing, recruiting, training and internal and external communication.  Maintain cost saving while improving accuracy and service quality.
  • 6. Marketing and Exchange • What is marketing? 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
  • 7. Selling is only the tip of the iceberg “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 is to make the product or service available.” Peter Drucker
  • 8. Selling (Old concept) Marketing (Modern concept) 1. Product enjoys the supreme importance. 2. Emphasis is on corporate objectives and needs. 3. Company-oriented selling efforts. 4. Goods are already produced and management sells them on profit through intensive advertising. 5. Selling aims at short-term objectives as it is only a tactical and routine activity. 6. Top priority is given to sales volume maximization leading to profit maximization. 1. Customer enjoys the unique importance. 2. Emphasis is on customer’s needs 3. Market-oriented selling efforts. 4. Customer’s demand determines production. 5. Marketing aims at long-term objectives. It has philosophical and strategic implications. 6. Top priority is given to profitable volume of sales and market share at fair prices and reasonable risk. Distinction between Marketing and Selling
  • 9. Definition: “Marketing Management is the process of ascertaining consumer needs, converting them into products or services to the final consumer or user to satisfy such needs and wants of specific customer segment or segments with emphasis on profitability ensuring the optimum of the services available to the organization.” - Dr. Rustom S. Davar Definition: “Sales Management is planning, direction and control of selling activities of a business unit including recruiting, selecting, training, equipping, assigning, routing, supervising, paying and motivating as these tasks apply to the sales force”. - American Marketing Association {Practically marketer has to do FAB (Features, Advantages and Benefits) analysis and sell, which is easier and effectual for results}
  • 10. What is Exchanged in Marketing? Goods Services Events & Experiences Persons Places & Properties Organizations Information Ideas
  • 11. 4 Types of Markets 1. Consumer Market: (consumption) 2. Business Markets: (saving/resell) 3. Global Markets: (different offering mix) 4. Nonprofit and Governmental Market: (bids)
  • 12. Marketing Concepts and Tools  Market: a collection of buyers and sellers  Marketplace: a physical market (store)  Marketspace: a digital market (Internet: e.g., www.secondlife.com)  Metamarket: markets involving closely-related products and services (e.g., www.edmunds.com)  Marketer and Prospect: A marketer is someone seeking a response from another party, called the prospect.
  • 14. Structure of Flows in a Modern Exchange Economy
  • 15. Marketing Concepts and Tools  Needs: the basic human requirements  Wants: specific objects that might satisfy the need  Demand: wants for specific products backed by an ability to pay. Examples: An American needs food but wants a hamburger, French fries and soft drink. Many people want a Mercedes, only a few are able and willing to buy one.
  • 16. Marketing Debate Does Marketers Create or Satisfy Needs?
  • 17. Marketing Concepts and Tools  Product: a value proposition  Offering: intangible value proposition (a combination of products, services, information and experiences (Volvo)  Brand: is an offering from a know source Examples: McDonald Lexus
  • 18. Only the best is good enough for Lexus customers
  • 19. Marketing Concepts and Tools Value is a ratio between what customer gets and what he gives Value = Benefits/Costs How to increase value? Raise benefits Reduce costs Raise benefits and reduce costs Raise benefits by more than the raise of costs Lower benefits by less than the reduction of costs
  • 20. Marketing Concepts and Tools  Exchange: a process of obtaining a product/service from someone by offering something For exchange to occur, there must be: • Two parties • Each with something of value to the other • Capable of communication and delivery • Free to accept/reject the offer • Agreement to terms Example: Caterpillar
  • 21. Marketing Concepts and Tools  Transaction: a trade of values between two or more parties. Does Transaction differs from Transfer
  • 22. Marketing Concepts and Tools  Relationship: building mutually satisfying long-term relations with key parties (customers, suppliers, distributor) in order to earn and retain their business.  Network: building mutually profitable business relationships between the company and its supporting stakeholders.
  • 23. Marketing Concepts and Tools  Marketing channels: a way/mean to reach target market. Three kinds of marketing channels: Communication channels Distribution channels Service channels
  • 24. Marketing Concepts and Tools  Supply Chain: longer channel stretching from raw materials to components to final products that are carried to final buyers.  Competition: all actual and potential rival offerings and substitutes that a buyer might consider.
  • 25. Marketing Concepts and Tools Four (4) levels of competition: 1. Brand competition: A company sees its competitors as other companies offering similar products and services to the same customers at similar prices. 2. Industry competition: A company sees its competitors as all companies making the same product or class of products. 3. Form competition: A company sees its competitors as all companies manufacturing products that supply the same services. 4. Generic competition: A company sees its competitors as all companies that compete for the same consumer dollars. (Example: Volkswagen)
  • 26. Marketing Concepts and Tools  Marketing Environment: actors that impact the company’s offerings (task & broad environment).  Marketing Program: a numerous decisions on the mix of marketing tools to use.  Marketing Mix: a set of marketing tools the firm uses to pursue its marketing objectives in the target market.
  • 28. The Four Ps The Four Cs Product Price Promotion Place Customer Solution Communication Conven- ience Marketing Mix
  • 30. Marketing Management •Marketing Management (Kotler): is the analysis, planning, implementation, and control of marketing programs designed to create, build, and maintain mutually beneficial exchanges and relationships with target markets for the purpose of achieving organizational objectives.
  • 31. Company Orientations to the Marketplace (Marketing Management Philosophies) 1. Production concept: assumes consumers favor those products that are widely available and affordable. (Focus: wide distribution; high volume). 2. Product concept: assumes consumers will favor those products that offer the most quality, performance, and features. (Focus: Superior product)
  • 32. Company Orientations to the Marketplace, cont. 3. Selling concept: assumes that consumers will either buy or not enough of the organizations’ products unless the organization makes a substantial effort to stimulate the customer’s interest in the product. (Focus: needs of the seller) The purpose of marketing is to sell more stuff to more people more often for more money in order to make more profit Coca-Cola’s former Vice president
  • 33. Company Orientations to the Marketplace, cont. 4. Marketing concept: holds that the key to achieving organizational goals consists in determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors. (Focus: different needs of buyers)
  • 34. Marketing and Selling Concepts Contrasted Factory Products Selling and Promoting e.g., Profits through Volume (a) The Selling Concept Starting Point Focus Means Example Ends Market Customer Needs Integrated Marketing e.g., Profits through Satisfaction (b) The Marketing Concept
  • 35. Theodore Levitt’s “Marketing Myopia,” cont. •What is the difference between marketing and selling? •“The difference between marketing and selling is more than semantic. Selling focuses on the needs of the seller, marketing on the needs of the buyer. Selling is preoccupied with the seller’s need to convert the product into cash; marketing with the idea of satisfying the need of the customer ….”
  • 36. Marketing Concept Four Pillar 1. Target Market: tailored marketing programs 2. Customer Needs:  Giving customer what they need is not enough; companies must help customers learn what they want.  Stated, Real, Unstated, Delight & Secret Needs. (Inexpensive car example)  Responsive, Anticipated & Creative Marketer.  Market-driving firm VS Market-driven firm.  Make and sell VS Sense and respond Philosophy.  Why it’s important to satisfy target customers? (Customer retention)
  • 37. Marketing Concept Four Pillar 3. Integrated Marketing: all company’s departments work together to serve the customer’s interests. a. External marketing: directed at people outside the company. b. Internal marketing: the task of hiring, training, and motivating able employees who want to serve customers well. Which one is more important? 4. Profitability
  • 38. Traditional Organization Chart Customers Front-line people Middle Management Top Management
  • 39. Modern Customer-Oriented Organization Chart Customers Front-line people Middle management Top manage- ment
  • 40. What makes companies adopt marketing concept? 1. Sales decline 2. Slow growth 3. Changing buying patterns 4. Increasing competition 5. Increasing marketing expenditures
  • 41. Company Orientations to the Marketplace, cont. 5. The customer concept: • Customer is the lifeblood of any company • Customer is the King
  • 43. Company Orientations to the Marketplace, cont. 6. The societal marketing concept: to determine the needs, wants, and interests of target markets and to deliver the desired satisfaction more effectively and efficiently than competitors in a way that preserves or enhances the consumer’s and the society’s well-being.
  • 44. Societal Marketing Concept Dalrymple & Parsons/Marketing Management 7th edition: Chapter 1 16 Marketing Managers Must Marketing Managers Must Balance Balance Promote sale of goods and services Long-term needs for a safe and healthy environment Profits Public Interest
  • 45. How are companies responding to the new challenges? 1. Reengineering 2. Outsourcing 3. E-Commerce 4. Benchmarking 5. Alliances 6. Partner-Suppliers 7. Market-central 8. Global and local 9. Decentralization
  • 46. Developing the Marketing Mix Program • Product • Price • Place (Marketing Channels) • Promotion Selecting the target market and designing the marketing mix go hand-in- hand
  • 49. 7Ps & 7Cs The 7 Ps The 7 Cs Organisation Facing Customer Facing Product = Customer/ Consumer Price = Cost Place = Convenience Promotion = Communication People = Caring Processes = Co-ordinated Physical Evidence = Confirmation
  • 51. Definition “A company’s marketing environment consists of the actors and forces outside marketing that affect management’s ability to build and maintain successful relationships with target customers.” ---- Philip Kotler
  • 52. Definition and Concepts • The microenvironment consists of the following actors close to the company that affect its ability to serve its customers: (1) The company (2) The suppliers (3) The marketing intermediaries (4) The customer markets (5) The competitors (6) The public. • The macro environment consists of the following larger societal forces that affect the microenvironment: PESTEL (1) Political (2) Economic (3) Demographic /Socio- Cultural (4) Technological (5) Political (6) Legal (7) Ecological/ Natural
  • 54. Opportunities Examples of Opportunities Posed by Marketing Environment in India 1. The New Economic Policies of the Government of India in general. 2. The New Industrial Policy. 3. Liberalisation of industrial licensing. 4. Foreign Exchange Regulation Act (FERA) and Monopolies and Restrictive Trade Practices Act (MRTP) liberalization. 5. Curtailment of and disinvestments in public sector. 6. The New Trade Policy – lowering of import tariffs, abolition of import licenses, convertibility of rupee, globalisation, etc. 7. Fiscal and monetary reforms, banking sector reforms, capital market reforms. 8. Removal or phasing out of subsidies. 9. Encouragement to foreign direct investment (FDI). 10. Dismantling of price controls and introduction of market-driven price environment.
  • 55. Threats Examples of Threats Posed By Marketing Environment In India 1. Entry of Multi-National Companies (MNCs) into the Indian market on a large scale increases the competition for products and services. 2. ‘Survival of the fittest’ rule forces many weaker and small-scale companies to close down due to non-viability. 3. Big players start buying smaller players through mergers and acquisitions. 4. Removal of subsidy affects profitability and viability of many industries. (Fertiliser industry is one such affected sector where units had to close down or stop products of certain products). 5. Banks and insurance sector came under competitive environment and were compelled to operate viably, at par with the private sector. 6. In general, many industrial units across India faced a destabilization consequent to the economic reforms. Their markets, market shares and profits came under severe pressure and viability became a big question.
  • 57. • Internal environment (SW) • External environment (OT) • SWOT analysis (Strength, Weakness, Opportunity, Threat) – TOWS Matrix • PESTLE analysis
  • 59. The Micro Environment Company Customers Publics Suppliers Competitors Intermediaries Forces Affecting a Company’s Ability to Serve Customers
  • 61. The Macro Environment Demographic Technological Cultural Economic Political Natural Forces that Shape Opportunities and Pose Threats to a Company
  • 62. PEST(LE) Analysis •Political factors •Economic factors •Socio-cultural factors •Technological factors •Legal factors •Ecological factors
  • 67. Socio-Cultural factors •Demographics •Distribution of income •Social mobility •Lifestyle changes •Consumerism •Levels of education
  • 68. Natural Environment Factors Affecting the Natural Environment More Government Intervention Shortages of Raw Material Increased Costs of Energy Higher Pollution Levels
  • 69. Ecological Environment •Environmental Management Perspective –Taking a proactive approach to managing the micro environment and the macro environment to affect changes that are favorable for the company. –How? –Hire lobbyists, run “advertorials”, file law suits and complaints, and form agreements.
  • 71. Positioning through marketing mix strategies Selecting market to target Determining market segmentation Identify markets with unfulfilled needs Selecting a target market(s) Determining market segmentation Identifying markets with unfulfilled needs Steps in Market Segmentation, Targeting, and Positioning © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
  • 72. Selecting & Relating to Customers • Identify factors to segment market • Determine potential of each segment Objective: identify & understand customer characteristics Segmentation
  • 73. Identifying Markets •What is a market? PEOPLE BUT - not just ANY people, they have to have • Willingness to buy • Purchasing power (money) • Authority to buy, a specific product •Consumer Markets and Industrial Markets
  • 74. Bases for Market Segmentation
  • 80. Reasons to Use Market Segmentation Reasons why firms segment markets
  • 83. The main criteria for evaluating market segments
  • 86. What is Benefit Segmentation?
  • 87. As implied by the name, benefit segmentation is splitting up the market based upon the key benefits and needs sought by purchasing consumers. As a result, benefit segmentation is a very consumer-centric approach as it identifies the core product needs of the consumers.
  • 89. Selecting & Relating to Customers • Criteria for selection • Segment strategy Objective: Selecting customers & allocating resources Segmentation Target Marketing
  • 90. Selecting a Target Market Determining which segments to target •Sales potential •Growth opportunities •Competition •Ability to serve the segment
  • 91. Target Marketing Strategies • Mass Market • One size fits all  Well defined mkts  Different approach for each  Single mkt  One approach Undifferentiated Differentiated Concentrated
  • 92. Selecting & Relating to Customers • Understand customers • Determine image Objective: Establish positive image relative to competitors Segmentation Target Marketing Positioning
  • 93. Positioning Creating a product image or identity in the minds of their target market relative to competitive products.
  • 95. Simple Preparation Involved Preparation Healthy Unhealthy Beef Pork Tuna Chicken Turkey Fresh Fish Bacon Hot Dogs Develop Product Positioning contd...
  • 96. How do these ads demonstrate that the companies understand the customer?
  • 97. Which segmentation variable is employed in this ad? Within that variable, which category does the ad target.