MKT. - Introd.
Transcript of MKT. - Introd.
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Process of planning and executing the
conception, pricing, promotion, and
distribution of ideas, goods, and services tocreate exchanges that satisfy individuals and
organizational objectives.
Marketing - the Formal Definition:
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A Professor at one of the IIM's (INDIA) was explainingmarketing concepts to the Students:-
1. You see a gorgeous girl at a party. You go up to
her and say: "I am very rich. Marry me!" - That's
Direct Marketing 2. You're at a party with a bunch of friends and see
a gorgeous girl. One of your friends goes up to her
and pointing at you says: "He's very rich. Marry
him." - That's Advertising 3. You see a gorgeous girl at a party. You go up to
her and get her telephone number. The next day,
you call and say: "Hi, I'm very rich. Marry me." -
That's Telemarketing
About Marketing.
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4. You're at a party and see gorgeous girl. You get
up and straighten your tie, you walk up to her and
pour her a drink, you open the door (of the car) for
her, pick up her bag after she drops it, offer her rideand then say: "By the way, I'm rich. Will you marry
me?" - That's Public Relations
5. You're at a party and see a gorgeous girl. She
walks up to you and says: "You are very rich! Canyou marry me?" - That's Brand Recognition
6. You see a gorgeous girl at a party. You go up to
her and say: "I am very rich. Marry me!" She gives
you a nice hard slap on your face. - That's Customer
Feedback
7. You see a gorgeous girl at a party. You go up to
her and say: "I am very rich. Marry me!" And she
introduces you to her husband. - That's demand and
supply gap
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8. You see a gorgeous girl at a party. You go up to
her and before you say anything, another person
comes and tells her: "I'm rich. Will you marry me?"
and she goes with him - That's competition eating
into your market share
9. You see a gorgeous girl at a party. You go up to
her and before you say: "I'm rich, Marry me!" your
wife arrives. - That's restriction for entering new
markets
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Evolution in brief!
*Marketing is old as Civilization!
*Its also a synonym for the art of selling in the past.
*It was only after 1945 that ad agencies began to define
discipline in a way which came close to the modern
marketing concept!*1950s seen as the decade of Advertising!
*1960s became customer focused and extensive use of
Marketing Research to investigate consumer needs &
wants, emerged in its current form.
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The discipline matured in 1970s led by Phillip Kotlers
seminal text Marketing Management .
Marketing evolved from practice to a discipline of
Learning.
Marketing became routinized as a key of Management
function.
In 1970s started, strategic planning, through
environmental changes and competitive positions.
In 1980s Marketing moved into competitive strategies by
Michael Porter and extended to Services.
Biggest Internet Revolution!
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Basically 3 concepts.
1. Entreprenuerial Marketing
2. Formulated Marketing
3. Intrerprenuerial Marketing
Abundance of choice doesnt necessarily mean value Paradox of 21st century!
New PerspectiveValue delivery!
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So Marketing as a process by
which customers needs and wants
are satisfied through quality
products and services offered for
customer satisfaction.
http://www.google.co.in/imgres?imgurl=http://clubbobstercb.com/wp-content/uploads/2010/08/Marketing-Concept.jpg&imgrefurl=http://clubbobstercb.com/marketing/marketing-concept/&usg=__icu2V2J9WaiEokQIxK4MLQpnUoo=&h=475&w=370&sz=18&hl=en&start=9&zoom=1&tbnid=UAbMdBrAsUY29M:&tbnh=129&tbnw=100&prev=/images%3Fq%3Dmarketing%2Bconcept%26hl%3Den%26gbv%3D2%26tbs%3Disch:1&itbs=1http://www.google.co.in/imgres?imgurl=http://clubbobstercb.com/wp-content/uploads/2010/08/Marketing-Concept.jpg&imgrefurl=http://clubbobstercb.com/marketing/marketing-concept/&usg=__icu2V2J9WaiEokQIxK4MLQpnUoo=&h=475&w=370&sz=18&hl=en&start=9&zoom=1&tbnid=UAbMdBrAsUY29M:&tbnh=129&tbnw=100&prev=/images%3Fq%3Dmarketing%2Bconcept%26hl%3Den%26gbv%3D2%26tbs%3Disch:1&itbs=1 -
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Marketing is for Everybody
TO SHOW THAT MARKETING IS ESSENTIAL
PROVIDE AN UNDERSTANDING OF THE BASICMARKETING CONCEPTS
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http://www.google.co.in/imgres?imgurl=https://www.jumeirah.com/Global/Sirius/About%2520the%2520program/HAMLEYS-logo.jpg&imgrefurl=https://www.jumeirah.com/en/Sirius/About-The-Program1/Partners/London/&usg=__VRnVmNHrg3XAfBO4cHQmrQVKPZQ=&h=300&w=300&sz=16&hl=en&start=60&zoom=1&tbnid=jzGkreBFKW_jtM:&tbnh=116&tbnw=116&prev=/images%3Fq%3DHamley,%2BUK%26start%3D40%26hl%3Den%26sa%3DN%26gbv%3D2%26tbs%3Disch:1&itbs=1 -
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The Nature of Marketing
What is the Purpose of Marketing?Satisfaction
Functional Satisfaction Psychological Satisfaction
The Four Utilities
Consumer Problems
Providing Benefit Bundles
Offering a Total Consumption System
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Simple Marketing System
Industry
(a collection
of sellers)
Market
(a collection
of Buyers)
Goods/services
Money
Information
Communication
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The Nature of Marketing
What is the Purpose of Marketing?Satisfaction
Increments of Satisfaction Facilitating Exchanges
Conditions for Exchange
Systems of Exchanges
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Evolving Views of Marketings Role
The customer as the controllingfunction and marketing as the
integrative function
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Customers
Front-line people
Middle Management
Top
Management
Traditional Organization Chart
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Customer-Oriented Organization Chart
Customers
Front-line people
Middle management
Top
manage-
ment
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Core Concepts of Marketing
Product or Offering
Value and Satisfaction
Needs, Wants, and Demands
Exchange and Transactions
Relationships and Networks
Target Markets & Segmentation
Marketing ChannelsSupply Chain
Competition
Marketing Environment
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Implications of marketing
Who are our existing / potential customers?
What are their current / future needs?
How can we satisfy these needs? Can we offer a product/ service that the customer
would value?
Can we communicate with our customers?
Can we deliver a competitive product of service? Why should customers buy from us?
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The marketing concept
choosing and targeting appropriate
customers
positioning your offering
interacting with those customers
controlling the marketing effort continuity of performance
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Successful marketing requires:
Profitable
Offensive (rather than defensive)
Integrated
Strategic (is future orientated)
Effective (gets results)
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The Indian Consumers
Changing Spending Patterns
36%
20%10%
4%
30%
40%
20%
9%
4%
27%
2003
32%
20%11%
5%
32%
Food & Grocery Fuel, Transport & Communication Discretionary Expenditure
Rent, Utilities & Education Savings & Investment
2008 2013
Changing consumer behavior is catalyzing change in
spending patterns, freeing up income for discretionaryexpenditure
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Emerging Trends
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Shift to ThriftRedefining Value
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Small WondersSmall Perk Me Up Products
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Mummy ka MagicStays Intact
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Eating Out at HomeEvolving Home Delivery Model
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Taste Bhi, Health BhiA very strong co-relation
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Food On The GoInstant Pick Me Up
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Eco Conscious
Eco ConsciousA light shade of green
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Food As DiscoveryMore Experimenting
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The Food ConnectUse of Social Media
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POP will remain
SupremeThe final test
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The changing Indian consumer
The media explosion.
Increase in disposable income.
The rise of the great Indian middle class
Increase in the number of earning young people
Change in expenditure patterns
Increase in the number of working women 40
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What is Marketing ?
Selling ?
Advertising ?
Any thing more?
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Examples of Buying Motives:
Psychological or Functional?
A senior wants to impress his date at
the prom .
His primary motive is ?
Psychological
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Examples of Buying Motives:
Psychological or Functional?
A girl wants to remember her grandmother on her birthday.
Her primary motive is?
Psychological
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Examples of Buying Motives:
Psychological or Functional?
A homemaker needs a new washing machine and has had
good experiences with Sears.
Her primary motive is ?
Functional
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Examples of Buying Motives:
Psychological or Functional?
A teacher wants to buy a practical car to be used for family
transportation.
Her/His primary motive is ?
Functional
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Examples of Buying Motives:
Psychological or Functional?
A career woman always buys Liz Claiborne clothes.
Her primary motive is?
Psychological
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Examples of Buying Motives:
Psychological or Functional?
An overweight 40 year old man wants to loose weight so
that he can reduce his blood pressure.
His primary motive is?
Functional
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Examples of Buying Motives:
Psychological or Functional?
A homeowner needs to mow their lawn.
Their primary motive is?
Functional
C B i B h i C
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Consumer Buying Behavior Competency
Functional
Motive
Psychological
Motive
The price is 40cents off theregular price.
It never needsironing.
Diamonds areforever.
Serving you since1971.
Ninety-daywarranty.
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Consumer Buying Behavior Competency
FunctionalMotive
PsychologicalMotive
Running shoe withbuilt-in arch.
Its all the rage
colored action wearand style.
Wheatiesthebreakfast ofchampions!
Steel-belted radialtires warranted for40,000 miles
A watcha gift shewill treasure
always.
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What is Marketing ?
We use the word Marketing to describe such things as analyzing the needs of the people
trying to guess what types of products they want
estimate how much they will buy
predict when they want to buy
determine where they go to buy the stuff
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What is Marketing ?
. And,
figure out the best price to sell it at - and can you stillmake a profit selling it at that price
decide on promotional things to create awarenessabout the product
look at the competition to see what they are doingwith pricing, features etc.
Marketing is concerned with anticipating consumer
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Marketing is concerned with anticipating consumerdemand and directing flow of goods from producers toconsumers.
Marketing has to do with matching producers outputs to
consumers inputs [ needs & wants ].
Serving the needs of customers is what business shouldbe all about
Marketing is the business function that interpretscustomer needs to the rest of the organization.
Marketing should begin with the customer needs - NOTwith the production process. Mkt. should anticipateneeds.
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The Importance of Marketing
Marketing is a core business discipline
The study of marketing is important to the basics ofrunning a business, big or small
When you buy a product - the cost of marketing amounts to40 ~ 60% of the totaleg. If we buy shoes for Rs.800,Rs.400 of that 800 has been spent on marketing (including
advertising, market research, development etc.)
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The Importance of Marketing
Getting a JOB in Marketing !! Personal selling
Advertising
Package Design
Transportation
Storage
Marketing Research
Product Development Wholesaling
Retailing
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Micro - marketing for a company
Macro - the whole economy
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Micro - marketing for a company, things
you do to accomplish the organizationsobjectives .
Macro - the whole economy and its flow of
goods and services from producers toconsumers
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Micro - Its not just selling stuff, but also
looking at what the customers want
Macro - Looking at how everybody in the
country can have access to things they need.Government has to make sure everybody
has fair access.
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Micro-Macro Dilemma
Government has to step in cause not everythingwould be produced fairly by companies - soregulation needed
Ex .1: It would be cheaper to make cars withoutairbags and seatbelts - but Govt. insists they mustso, it has to be done.
The Marketing Functions
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g
Buying
TransportingStoring
Grading
Financing
Risk Taking
Information Collection
Research.
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Innovation is encouraged by a market-directed economy
(capitalism) because people who come up with new ideas are free to
try and market them and make a fortune. In a communist country,
government has strict controls on the means of production sothere is a limit to what people can manufacture.
In a capitalist economy, people are always trying think of new ways
to satisfy un-met needs, and, this encourage new thinking
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Advocacy Advertising
You are not trying to sell a product, you are trying toget people to believe in something, or behave in acertain way
eg.- Dont drink and drive- Canadian Cancer Society- recycle
- use the TTC, save gas
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Marketing Concept
- Social Responsibility
- improve positive effects on Society andreduce negative effects
- environmental problems
- social responsibility conflicts with profit
objective(raises ?, is mktg concept desirable)
Marketing Concept
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- Social Responsibility
-? Of social responsibility cutting intoprofits
- some companies have been verysuccessful at dealing with this eg. BODYSHOP
- they realize it is a way to endearthemselves to trendy customers
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Company Orientations Towards the Marketplace
Orientation Description Relative TimeSpan
Basic ManagerialObjective
Production Transition from Home
Manufacturing to Factories
Industrial
Revolution
Profit Maximization via
Economies of Scale
Product &Financial
Focus on Product Development,Performance and Features and
the Growth of Large Scale
Industrial Empires
Profit MaximizationThrough Superior
Product Performance
Sales Transition from Scarcity of
Goods to Scarcity of Markets;
Market Saturation with Basics
Profit Maximization via
Demand Generation
Marketing Transition from Internal
(Organization) to External
(Customer) Basis for Guiding
Marketing Decisions
1990s Profit Maximization via
Matching of Products to
Customer Wants
The Marketing Concept
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The Marketing Concept
A Customer Orientation
Backed By Integrated Marketing
Aimed at Generating Customer
Satisfaction and Repurchase As The Key To
Satisfying the Organizations Goals
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The Marketing Concept (Contd..)
Focus Means End
Sales Concept Products Selling &
Promotion
Profits Through
Sales Volume
Marketing
Concept
Customer Needs Integrated
Marketing
Profits Through
CustomerSatisfaction
Stages in Consumer Decision Process
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Stages in Consumer Decision Process
Awareness
Interest
Decision
Satisfaction
Action
Advertising
Channel
Product /
Service
Price
Word-
of- Mouth
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Cost of Losing and Attracting Customers
Cost of attracting a new customer can be upto 5 times the cost
of keeping a current one happy
Cost of Offensive Marketing > Cost of Defensive Marketing
Some companies have increased profits from 25% to 85% by
reducing defections by 5%
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Conduct A Marketing Review (3-C Analysis)
Opportunity Identification
B. Assessment of
COMPANY
Capabilities and
Current Marketing
Position
A. Analysis of
CUSTOMER
Trends, Needs,
Perceptions,
Behavior
C. Analysis of
COMPETITORS
Current Position,
Capabilities,
Actions
I l i Th M k i Mi (F P )
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Implementation: The Marketing Mix (Four Ps)
Product
Price
Place
Promotion
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3C - 4P Framework
Customer
Company
Competitor
Product
Price
Promotion
Place
Colgate
IDSPDA /
Infiniti
Sealed-Air
Barco
Nestle
Rohm&Haas
Intel
Dell
BMW
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Marketing System
Short Term Controllable Factors
Product
Place
Price
Promotion
Long Term Factors
Technological
Legal
Socio / Cultural
Economic
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Recasting the 3C - 4P Framework in Value Terms
Customer
Company
Competitor
Product
Price
Place
Promotion
Creating
Value
Capturing
Value
CommunicatingValue
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Model of Consumer Behavior
MarketingMix
Stimuli
Product Price
Promotions Advertising
Place
Buyers Black Box
??
PsychologicalMemory
Perception
Motivation
Personality
Demographics
Environmental
Family
Culture
Buyers Responses
What is purchased? When, Timing? How much?
For what use?
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The most important aspect of any companys Marketing
concept is identifying its SWOT Analysis.
What is SWOT analysis?
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SWOT Analysis - Examples
Example 1 - Wal-Mart SWOT Analysis. Strengths - Wal-
Mart is a powerful retail brand. It has a reputation for value
for money, convenience and a wide range of products all in
one store. Weaknesses - Wal-Mart is the World's largestgrocery retailer and control of its empire, despite its IT
advantages, could leave it weak in some areas due to the
huge span of control. Opportunities - To take over, merge
with, or form strategic alliances with other global retailers,
focusing on specific markets such as Europe or the Greater
China Region. Threats - Being number one means that you
are the target of competition, locally and globally.
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Example 2 - Starbucks SWOT Analysis. Strengths -
Starbucks Corporation is a very profitable organization,
earning in excess of $600 million in 2004.Weaknesses -Starbucks has a reputation for new product development
and creativity. Opportunities - New products and services
that can be retailed in their cafes, such as Fair Trade
products. Threats - Starbucks are exposed to rises in thecost of coffee and dairy products.
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Example 3 - Nike SWOT Analysis. Strengths - Nike is a
very competitive organization. Phil Knight (Founder and
CEO) is often quoted as saying that 'Business is warwithout bullets. 'Weaknesses - The organization does have
a diversified range of sports products. Opportunities -
Product development offers Nike many opportunities.
Threats - Nike is exposed to the international nature oftrade.
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Example 4 - Indian Premier League (IPL) SWOT
Analysis. Where will you find the Mumbai Indians, the
Royal Challengers, the Deccan Chargers, the ChannaiSuper Kings, the Delhi Daredevils, the Kings XI Punjab,
the Kolkata Knight Riders and the Rajesthan Royals? In
the Indian Premier League (IPL) - the most exciting
sports franchise that the World has seen in recentyears, with seemingly endless marketing opportunities
(and strengths, weaknesses and threats of course!).
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Example 5 - Bharti Airtel SWOT Analysis. Weaknesses -
An often cited original weakness is that when the business
was started by Sunil Bharti Mittal over 15 years ago, thebusiness has little knowledge and experience of how a
cellular telephone system actually worked. So the start-up
business had to outsource to industry experts in the field.
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EX:-1 While entering a developing country like India, MNCs should
consider the factors to which consumers in India are sensitive.One such factor is price. Indian consumers are price sensitive.
They always looks for value of money. This explains the
success of Nirma washing powder which forced HLL to come
out with a low prices detergent Wheel. Also the success of aproduct depends on the tastes and preferences of customers.
Once McDonalds customized its products according to the
tastes and preferences of the Indian customers, it found
acceptability in the market. Thus, before entering the Indian
market, MNCs should do a proper study of the customers
tastes and preferences , and this is particularly applicable to
food products, because in India, food habits differ from region
to region.
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EX:-2
During recession, most companies resort to downsizing
and cutting costs related to advertising. But advertisement
plays a crucial role in creating demand for goods. So it is
not advisable to reduce costs related to advertising, ratherexpenditure on advertisements should increase during a
recession. At this time, they build up their brands. If they
do so, the companies will be in a competitive position once
the recession is over and demand for goods picks up.
Brandbuilding always involves spending on
advertisements, packaging etc. Advertising during
recession is also advisable because it reminds consumers
about the product and prevents the product from getting
erased from consumers mind.
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Case :- Modernizing sales outlets
Mr. Harish was a refugee when he started his small grocerybusiness about 40 years back. Initially, he hawked his goodsdoor to door and soon developed a sizeable number of steadycustomers. This was largely due to his sober temperament,reliable dealings and his amiable nature. His extrovert naturehelped him develop many friends and well wishers.
Over a period of time, Mr. Harish became a socially prominentperson with good acquaintance from many walks of life. Heexpanded the range of his business activities and he now owns aseveral shops dealing in consumer durables, dairy products, a
general store and a large medical shop. Being conservative, hefeels emotionally attached to his original grocery business andcontinues to operate it with enthusiasm. His business place haseven come to be a meeting venue for people of his generation.
His children are grown up and the eldest one Raj has just returned
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His children are grown up and the eldest one, Raj, has just returned
from abroad after completing his Management education.
Ambitious by nature, Raj, would like to expand the business fast. He
feels that he needs to be professional in his approach. In hisopinion, his fathers way of dealing with people is outdated .Many a
time, he feels irritated when his fathers old friends drop in at the
shops and spend time talking with him .Raj feels that this type of
casual coming together is a waste of time .He would prefer to be
more business like. He would like to deal with precision and in amethodical manner .He expects that his customers should appreciate
this modern way of doing business.
He has, however, revealed his inner feelings only in an indirect way
to his father and he found that his father believes in maintaining
close personal links with his customers. Some of the customers
have, anyhow, started noticing the change in the way in which Raj
deals with them. They feel that the old warmth of their relationship
with the senior Harish is somehow missing and they are now less
welcome at the shops.
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Questions
What do you think regarding the contribution of personal
relationship in such a business?
Do you agree with the approach adopted by Raj? Do you
have any suggestions to make?