MARKETING MANAGEMENT

UNIT I

MARKET
An arena where buyers and sellers meet

MARKETING
Satisfying needs and wants through an exchange process Marketing is the process of planning and executing the conception, pricing, promotion, and distribution (4 Ps) of ideas, goods and services to create exchanges (with customers) that satisfy individual and organizational objectives.

Type of organizations that use marketing

All!! Corporations: ie Pepsi, Coke, GM etc. Government: promoting the health plan, politicians during elections Hospitals: Free Diabetes check ups Educational Institutions: Religious Institutions: Are redesigning their service offering to better meet the needs of their target audience so as to keep members and financial support For eg., Slokas from Sanskrit to Language of the State Army: A marketing plan to attract recruits.

MARKETING MANAGEMENT
Allocating the resources of the organisation towards marketing activities

Stages in Marketing
The Simple Trade Era: Prior to the Industrial Revolution, people made most of what they consumed. Any excess household production could be brought to town and sold or traded for other goods. This type of economy is commonly referred to as a pure subsistence economy. In a pure subsistence economy, there is little need for marketing (to facilitate exchanges), since each household produces what it consumes.

Stages in Marketing
The Production Era: The production era is so named because many companies' main priority was the reduction of the cost of production. Companies felt that exchanges could be facilitated merely by lowering manufacturing costs and, in turn, passing along the cost savings to customers in the form of lower prices. This focus on production was fueled by such milestones as Henry Ford's invention of the assembly line and the more efficient work principles advanced by Fredrick W. Taylor's scientific management movement. These two innovations made business managers aware that mass production resulted in steeply declining unit costs of production. In turn, the declining unit costs of production made profit possibilities look fabulous.

Stages in Marketing
Product era: The product philosophy holds that the organization knows its product better than anyone or any organization. The company knows what will work in designing and producing the product and what will not work. For example, the company may decide to emphasize the low cost or high quality of their products. This confidence in their ability is not a radical concept, but the confidence leads to the consumer being overlooked.

Stages in Marketing
The Sales Era The next era of marketing evolution is called the sales era because many companies' main priority was to move their products out of the factory using a variety of selling techniques. During The sales era, companies felt that they could enhance their sales by using a variety of promotional techniques designed to inform potential customers about and/or persuade them to buy their products. This type of thinking was initiated by the economic climate of the time.

Stages in Marketing
The Marketing Department Era: Firms that see themselves as manufacturers of products use selling techniques that are preoccupied with converting products into cash. Firms that see themselves as marketers focus on satisfying the needs of buyers through the products that are sold, as well as all those functions associated with developing the product, delivering the product, and consuming the product. In short, selling focuses on the needs of the seller; marketing focuses on the needs of the buyer.

Stages in Marketing
The Marketing Company Era Firms that have moved from simply having a marketing department that follows a customer orientation to having the marketing department guide the company's direction are called marketing companies.

Stages in Marketing
The Relationship Marketing Era Relationship marketing is the process whereby a firm builds long-term satisfying relations with its customers in order to retain the customers' loyalty in buying the firm's products. Philip Kotler (1997), a noted author of several books on marketing, has pointed out that the need for customer retention is demonstrated by the fact that the cost of attracting a new customer is estimated to be five times the cost of keeping a current customer happy.

Stages in Marketing
Societal Marketing Concept: Takes into consideration the well being of the consumer. Eg: Smoking/Alcohol in movies

 Marketing as science or an art Marketers create needs or needs pre-exist in the society Market place is physical and market space is digital

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

Who markets?
Marketer: who seeks a response may be attention, a purchase etc from another party called a prospect

8 States of Demand
Negative Demand: Consumers dislike the product and may even pay a price to avoid it Nonexistent demand: Consumers may be unaware or uninterested in a particular product Latent demand: Consumers may share a strong need that cannot be satisfied by an existing product

8 States of Demand
Declining Demand: Consumers begin to buy the product less frequently or not at all Irregular Demand: Consumer purchases vary on a seasonal, monthly, weekly, daily or even hourly basis Full Demand: Consumers are adequately buying all the products put in the market Overfull Demand: More consumers would like to buy the product that can be satisfied

8 States of Demand
Unwholesome demand: Consumers may be attracted to the products that have undesirable social consequences

Key customer markets

Consumer markets Business markets Global markets Nonprofit and Governmental markets

Scope of Marketing
Businesses and marketing philosophies are changing due to: Changing Technology Globalization Deregulation Privatization Customer empowerment Customization Heightened competition Industry convergence Retail transformation Disintermediation

Fundamental Marketing Concepts Core Concepts

Needs, Wants and Demands: Stated needs, Real needs, Unstated needs, Delight needs and secret needs Target Markets, Positioning and Segmentation Offerings and Brands Value and Satisfaction Marketing Channels: Communication, distribution, and service channels Supply Chain Competition Marketing Environment : Task and broad environment Market Planning

Marketing of Services
Offer as a pure tangible good: For eg bread, toothpaste etc Offer of a tangible good with accompanying services: Maruti Suzuki sells car with customer service Offer of a hybrid containing equal parts of goods and services For eg restaurant provides food and service quality

Marketing of Services
Offer of a major service with minor goods. For eg., service provided by airlines consists of a major part of transportation service (intangible) with a minor part of goods such as food and drinks (tangible) Offer of a pure service: For eg Consultancy

Differences
Physical goods Tangible Homogeneous Product and distribution are separated A thing Core value produced in factory Customers do not participate in the production process Services Intangible Heterogeneous Production, distribution and consumption are simultaneous An activity or process Core value produced in buyer seller interaction Customers participate in the production process

Differences
Physical goods Can be kept in stock Transfer of ownership

Services
Cannot be kept in stock No transfer of ownership

Definitions
American Marketing Association: activities, benefits or satisfaction which are offered for sale or provided in connection with the sale of goods Gronross: A service is an activity or series of activities of more or less intangible in nature that normally, not necessarily, take place in interaction between the customer and service employees and/or physical resources or goods and/ or systems of the service provider, which are provided as solution to customer problems.

Characteristics
Intangibility:

Tangibility

A goods Service Continuum

Intangibility

Characteristics
Inseparability: Services are produced and consumed inseparably eg Hair Dresser and Goods Perishability: Services cannot be stored as they are perishable eg airline seats Heterogeneity or lack of standardization: Physical products have consistency but services vary according to the provider

Characteristics
Customer Participation: A hair dresser cannot cut your hairs without your permission Ownership: Without physical possession transfer of ownership is not possible.

The Service Marketing Mix

Product: Activity that a marketer offers to perform Generic: Basic Benefit: loans and Deposits Expected: Expected Benefit: Timely service Augmented: Additional benefit: friendly employees Potential: Pleasant surprise: readiness to go out of the way to satisfy the customer

Pricing: Different terms used for different services Legal Services: Fee Transportation: Fare Factors which influence price: Structure of the market Type of the organisation Price charged by the competitor The life-cycle stage of the service Organizational objective Government Regulation

 Promotion: Effective communication is needed to inform customers about their role in the service delivery process. Place: Making the service available and accessible Eg Airline through travel agent/ hotel agent People: employees and customers

 Physical Evidence: Branding, logos etc

Peripheral and integral evidence
Railway tickets that can be handed over Facilities like A/C

Process: The way in which service is performed

Case Study
Charminar Coffee House was started by one Mr. Seth who has considerable experience in running restaurants. He has five more restaurants running in town and all of these are doing fairly good business. One of these also offers lodging facilities. Surprisingly, Charminar Coffee House could never do well. Neither was any systematic effort ever made to improve its working. So when he got this lucrative offer from Mr. Raj Kumar Jain fours years ago he jumped at it

 It is quite strange to note that Jain has no previous experience in this field. While he was in the Indian Army and retired at the rank of a Major, none of hid family members have any experience in the catering line, though his community is famous for the same. Mr Jain completely renovated the place with attractive interior dcor, The menu offered was also trebled with south Indian, Guajarati and Punjabi. It is now a place bustling with 125 135 customers per day

 Discuss the various reasons as to why the restaurant could not function well under the earlier management? Discuss the strategies which are used by Charminar Coffee House?