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INTRODUCTION TO MARKETING
Marketing is not only much broader than selling, it is not a specialized activity at all It encompasses the
entire business. It is the whole business seen from the point of view of the final result, that is, from the
customers point of view. -Peter Drucker
Marketing is the social process by which individuals and groups obtain what they need and want through
creating and exchanging products and value with others -Kotler
Marketing is the management process that identifies, anticipates and satisfies customer requirements
profitably -The Chartered Institute of Marketing (CIM)
From the strategic perspective, marketing is satisfying customer needs profitably and better than the
competition (broader goal creating value for all the stakeholders including society)
From the tactical perspective, marketing is about ensuring the right product, in the right place, at the
right time, at the right price
Need is a generic desire(+) or problem (-) that consumers seek to fulfill or solve (e.g. Hunger)
Want is the concrete form in which a need is being shaped (e.g. I want to eat Domino's Pizza)
Demand is want backed by buying power (normally directed towards a specific product/brand)
Maslows Needs: Physiological Safety Belongingness Self-esteem Self-actualization
MARKETING PHILOSOPHIES
PRODUCT CONCEPT
Focus on product quality, design and features too much technical orientation
Basic assumption is customer will purchase if the product is of higher quality, has maximum number
of features and best design
Do not consider customer needs, external factors and competition leading to marketing myopia
PRODUCTION CONCEPT
Focus on production efficiencies, low costs and mass distribution
Basic assumption is all output can be sold as demand for a product is greater than supply
Beneficial when increasing production raises economies of scale and helps reduce price
"Doesn't matter what color car you want, as long as it is black." - Henry Ford
SELLING CONCEPT
Focus on selling the product with the objective of profit maximization
Basic assumption is any product can be sold if sales people can convince the customers
Customer needs or satisfaction is not considered and can be counterproductive in long run
Widely criticized yet widely used across industries!
MARKETING CONCEPT
Focus on determining customer needs and wants, produce product and sell it to consumers
Basic assumption is supply for a product is greater than demand (high competitive intensity)
Very important market and product fit
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SOCIETAL MARKETING CONCEPT
Focus on all the stakeholders (S
Balancing all three aspects: consumer needs + business profit + societys interests
Definitely the best approach
BASIC MARKETING PROCESS
SITUATIONAL ANALYSIS
External Environment Analysis (Analyzing factors outside the organization)
Macro Environment Analysis
cultural and Technological)
Micro Environment Analysis (Value Chain Analysis=
and Distributors)
Industry or Competitive Analysis (Porters Five Forces)
Internal Environment Analysis (Analyzing factors inside the organization)
Analyze all organizational functions=Marketing, Finance, Production, HR and IT
5M Framework=
Portfolio Analysis (BCG Matrix, GE McKinsey Matrix)
Internal + External Analysis (SWOT=
MARKETING OBJECTIVES:
Should be SMART = Specific,
MARKETING STRATEGY:
Deals with broader level strategic decisions
STP = Segmentation, Targeting and
MARKETING TACTICS:
Marketing Tactics or Marketing Mix d
Most widely used framework is 4Ps =
4Cs= Customer solution, Customer cost, Convenience, and Communication
For services industry 7Ps = 4Ps +
MARKETING IMPLEMENTATION:
Is equally important as planning
MARKETING AUDIT AND CONTROL
You cant manage what you cant measure
Involves evaluation of marketing strategy and implementation
Provides inputs for future marketing strategy
Situational
Analysis
Marketing
Objectives
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ONCEPT
Focus on all the stakeholders (Short term consumer wants Long term consumer welfare)
Balancing all three aspects: consumer needs + business profit + societys interests
Definitely the best approach all preaches now-a-days but few follows!
External Environment Analysis (Analyzing factors outside the organization)
Macro Environment Analysis (PEST=Political-legal, Economic
echnological)
Micro Environment Analysis (Value Chain Analysis= Customers, C
and Distributors)
Industry or Competitive Analysis (Porters Five Forces)
Internal Environment Analysis (Analyzing factors inside the organization)
Analyze all organizational functions=Marketing, Finance, Production, HR and IT
5M Framework=Men, Money, Machinery, Materials and Minute
Portfolio Analysis (BCG Matrix, GE McKinsey Matrix)
Internal + External Analysis (SWOT=Strength, Weakness, Opportunity and
pecific, Measurable, Achievable, Realistic and Time-
Deals with broader level strategic decisions
argeting and Positioning
Marketing Tactics or Marketing Mix deals with more specific and tactical level decisions
Most widely used framework is 4Ps = Product, Price, Place and Promotion
Customer solution, Customer cost, Convenience, and Communication
For services industry 7Ps = 4Ps + (People, Process and Physical Evidence)
:
Is equally important as planning but many a times not properly executed
AND CONTROL:
You cant manage what you cant measure - so, measure and then manage!
Involves evaluation of marketing strategy and implementation
for future marketing strategy
Marketing
Strategy
Marketing
Tactics
Marketing
Implementation
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ong term consumer welfare)
Balancing all three aspects: consumer needs + business profit + societys interests
External Environment Analysis (Analyzing factors outside the organization)
conomic-demographic, Socio-
Customers, Competitors, Suppliers
Internal Environment Analysis (Analyzing factors inside the organization)
Analyze all organizational functions=Marketing, Finance, Production, HR and IT
pportunity and Threat)
-bound
tactical level decisions
romotion (by McCarthy)
Customer solution, Customer cost, Convenience, and Communication
hysical Evidence)
any a times not properly executed
so, measure and then manage!
Marketing
Implementation
Marketing
Audit and
Control
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MAJOR MARKETING FRAMEWORKS
PORTERS FIVE FORCES
Contributed by Michael E. Porter
Help analyze competitive scenario in
an industry
Ideal scenario to enter:
Entry Barrier=High
Buyer Power=Low
Supplier Power=Low
Threat of Substitution=Low
Competitive Rivalry=Low to
medium
Current players try to build high
entry barriers to prohibit new comers
from entering
Examples of high entry barrier
strong distribution channel of ITC in
the Cigarette industry
Example of low Supplier Power HUL
getting long credit periods from
suppliers
BCG MATRIX
Contributed by Boston Consulting
Group
Best-known portfolio planning
framework (simple to understand
and use, provides quick guidelines
in strategic investment planning)
Used to analyze current business
portfolio at the SBU level (can be
adapted to use for products also)
Four possible strategies for SBUs
or products: build market share,
hold, harvest and divest
Helps to decide which SBUs or
products should receive more or less investment and which SBUs or products should be divested
Pitfall: oversimplifies a complex decision, assumes that higher rates of profit are directly related to high
rates of market share (based on economies of scale or experience curve) which might not be the case
a new or disruptive technology might give better profitability
The GE/McKinsey Matrix is a more advanced form of the BCG matrix which addresses its pitfalls