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ARKETING MANAGEME

CHAPTER 1 :
DEFINING MARKETING FOR THE 21st
CENTURY

Nataraj Pangal | Shreya

From the time you wake up..

Turn off that alarm brush your teeth


take a shower have breakfast
get dressed travel to work use the
copier go out for dinner at ____ - fall
asleep
We use more than 250 brands by the
time our day ends !!

Marketing is omnipresent ..!


The average person in a metro-city is
exposed to over 3,000 advertising
messages a day!!
...consciously or
otherwise.
Source: http://www.superprofile.com

We are constantly being targeted !!

Lets define

ARKETING DEFINITIO

Social
Definition

Marketing is a societal process by which individuals


and groups obtain what they need and want
through creating, offering and freely exchanging
products and services of value with others

AMA Definition
Marketing is 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 goals.

ARKETING DEFINITIO

Kotler
Definition
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.

Marketing is the management process


that identifies, anticipates and
satisfies customer requirements
profitably
The Chartered Institute of Marketing

The right product, in the right place, at the right time, and at the
right price
Adcock et al

Marketing is the human


activity directed at
satisfying human needs
and wants through an
exchange process

Philip Kotler

The AMA definition:


Marketing is 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.

To accompany A Framework for Marketing Management, 2nd Edition

Slide 13 in Chapter 1

No single definition or
approach
But the common subject matters:
The ability to satisfy customers,
The identification of favorable
marketing opportunities
The need to create an edge over
competitors
The capacity to make profits to enable
a viable future for the organization
The aim to increase market share
mainly in target markets

Some marketing Gurus..

WHAT IS MARKETED?

GOODS

PLACES

SERVICE
EXPERIENCES
S
EVENT
S
PERSONS

PROPERTIE
S

INFORMATION

ORGANIZATION
S

IDEAS

DEMAND STATES

Dental Work

Negative Demand Dental Work


Vaccination
No Demand
Latent Demand
Declining Demand
Irregular Demand
Full Demand
Overfull Demand
Unwholesome
Demand

Foreign Language Courses


Harmless Cigarettes
Fuel-Efficient Cars
Churches
Hotels
Mass-Transit
Changing Preference
Increasing Competition
Demarketing
Cigarettes
Alcohol

MARKETING CONCEPTS

Metamark
et
Cluster of
complement
ary products
Spread
across a
diverse set
of industries

Automobile

www.marutit
ruevalue.co
m

MARKETING CONCEPTS

Needs, Wants and Demands


Needs Basic Human Requirements
Wants Directed at specific objects
Demands Backed by ability to pay

Target Markets, Positioning &


Segmentation
Offerings and Brands
Offering Value Proposition made Tangible
Brand Offering from a known source

Value & Satisfaction


Value Benefits / Cost
Customer Value Triad Quality, Service and
Price
Satisfaction Products perceived
Marketing
performance
Channel
Communication Channel Deliver &
Receive message
Distribution Channel Display, sell &
Deliver

COMPANY ORIENTATION

The Production
Concept
Oldest Concept
Consumers will prefer products that are widely
available & Inexpensive
Concentrate on achieving high production
efficiency, low costs and mass distribution
Eg: - Lenovo and Haier in China

The Product Concept


Consumers favor products that offer most
quality, performance and innovative features.
Make superior products and improve them over
time.
Caught in a love-affair with their product.

COMPANY ORIENTATION

The Selling Concept


Consumers, if left alone, wont buy enough of the
organizations products.
Must undertake an aggressive selling and
promotion effort.
Practiced most aggressively with unsought
goods.
Eg:- Insurance & Encyclopedias.
Aim is to sell what they make rather than make
what the market wants.
The Marketing
Concept
Customer Centered instead of Product
Centered.
Not to find right customers for your products,
but to find right products for your customers.
Eg:- Dell
Reactive Market Orientation Understanding
and meeting customers expressed needs
Proactive Market Orientation - Understanding
and meeting customers latent needs
Total Market Orientation

COMPANY ORIENTATION

Senior Mgmt
Marketin
g
Dept

Other
Depts

Products &
Services
Communication
s

Internal
Marketing

Channels

Integrated
Marketing

Holistic
Marketin
g
Concept

Performance
Marketing

Relationship
Marketing
Commodity

Legal

Environment
Ethics
Sales
Revenue Brand &
Customer

Partners
Customer
s
Channe

MARKETING TASKS

Developing Marketing Strategies &


Plan
Capturing Marketing Insights
Connecting with Customers
Building strong brands
Shaping the market offering
Delivering Value
Communicating Value
Creating Long-Term Growth

Evolution of
the marketing
concept

Company Orientations Towards the


Marketplace

Consumers prefer products that are


Production
Production Concept
Concept widely available and inexpensive

Product
Product Concept
Concept
Selling
Selling Concept
Concept
Marketing
Marketing Concept
Concept

Consumers favor products


that
offer the most quality,
performance,
Consumers
will buy
products
or innovative
features
only if
the company aggressively
promotes/sells these products
Focuses on needs/ wants of
target
markets & delivering value
better than competitors

Customers
Front-line people
Middle Management
Top
Management

Traditional Organization Chart

Modern Marketing Concept

Modern Marketing Concept


Customer-Oriented Organization Chart
Customers
Front-line people

s
om
er

us
t

s
er
m

Top
management

to
us
C

Middle management

Core Concepts of Marketing


Needs, wants,
and demands
Markets

Exchange,
transactions,
and relationships

Products
and services

Value and
satisfaction

The Marketing Mix


Developed to achieve the companys
objectives.
Also called:
4 Ps of
Marketing

Product

What is a Product?

A product is anything that can be


offered to a market to satisfy a want
or need, including physical goods,
services, experiences, events,
persons, places, properties,
organizations, information, and
ideas.

Product Mix

Total sum of all products and variants


offered by an organization

Five Product Levels

Hotel Example:
Core product: rest and sleep
Basic product: room includes bed,
bathroom, towels, desk, dresser,
closet
Expected product: clean bed, fresh
towels, working electrical utilities
Augmented product: exceeds
customer expectations
Potential product: which includes all
possible augmentations and
transformations

Product Differentiation

Product form
Features
Customization
Performance
Conformance
Durability
Reliability
Repairability
Style

Service Differentiation

Ordering ease
Delivery
Installation
Customer training
Customer consulting
Maintenance and repair

Product Life Cycle

Some products are just


great..

But there are risks Involved:


There is always a RISK of product
failure due to:
Failure of conventional marketing
research
Failure to gauge consumer tastes
Outsmarted by competition

Some Products That Failed..

Source: http://lilomag.com/2011/01/31/top-10-failed-products/

People tend to pamper their


pets, so its not far-fetched
to believe consumers might
serve bottled water to their
cats
and
dogs.
But despite the fact that the
water came in such delicious
flavors as Crispy Beef and
Tangy Fish, it never seemed
to catch on..

In what must be one of


the most bizarre brand
extensions ever Colgate
decided to use its name
on a range of food
products called Colgates
Kitchen Entrees.

Needless to say, the


products did not take off
and never left U.S. soil.

Hockey Puck Mouse


(1998-2000) by Apple

This design debacle came


in an array of Jellies colors,
but the cutesiness couldn't
compensate for the
awkward round shape.

The mouse was difficult to


maneuver and the push
button frustratingly evasive

The 2-foot cord only barely


reached around from the
left-side USB port of most
App

After watching their


share of the soft drink
market shrivel for
decades, in 1985 the
Coca-Cola bottling
company decided to do
something about it:

They introduced the


New Coke with a
change in their secret
formula of more than a
100 yrs.

Consumers revolted
and ultimately the
product failed.

New Product Testing


It means that before the full-scale
commercialization of new products,
launching them into test markets to
test its viability.

Coke is test
marketing some
really cool looking
aluminum bottles
for Coke Classic,
Diet Coke, and
Coke Zero at
nightclubs and
special vending
machines.
Source:

http://www.vendingmarketwatch.com/news/10282919/coca-cola-co-to-test-market-machines-that-utilize-the-google-wallet

Vending
machines
being tested
with Google
Wallet smart
phones

Source:

http://www.vendingmarketwatch.com/news/10282919/coca-cola-co-to-test-market-machines-that-utilize-the-google-wallet

PRICE

Definition:
In ordinary usage, price is the
quantity of payment or
compensation given by one party to
another in return for goods or
services.

Objectives of Pricing
Short-term profit maximization
Short-term revenue
maximization
Maximize quantity
Maximize profit margin
Differentiation
Survival

Source: http://entrepreneurs.about.com/od/salesmarketing/a/pricingstrategy.htm

Pricing Strategies

Major Pricing Strategies


1.
2.
3.
4.
5.

Price Vs. Non-price competition


Market entry strategies
Discounts and allowances
Geographic pricing strategies
Special pricing strategies

Place

Marketing Channels
and Supply Chain
Management
The fourth P of marketing
(place)

the
Number of Channel
Transactions
1
2
3
4
5
6
7
8
9
= Manufacturer

= Customer

the
Number of Channel
Transactions
1

Store

3
= Manufacturer

= Customer

= Distributor

Retailer
Retailer

Consumer
Consumer

Retailer
Retailer

Consumer
Consumer

Retailer
Retailer

Consumer
Consumer

Distributor
Distributor Wholesaler
Wholesaler

Mfg
Mfg

3-level channel

Wholesaler
Wholesaler

Mfg
Mfg

2-level channel
Manufacture
Manufactur
1-level channel
Consumer
Consumer

Manufacture
Manufactur
0-level channel

Consumer
Consumer Marketing
Marketing
Channels
Channels

Conventional Distribution
Channel vs. Vertical Marketing
Systems
Vertical
marketing
channel

Manufacturer

Manufacturer
Wholesaler

Conventional
marketing
channel

Wholesaler
Retailer
Consumer

Forward &
Backward
Integration

Retailer

Eg. ITC
Ashirwad atta
Sunfeast

Consumer

Evaluating
Evaluating
FEEDBACK

Motivating
Motivating
Training
Training
Selecting
Selecting

Channel
Channel Management
Management Decisions
Decisions

Promotion

Concept of Promotion
Promotion is all personal and
impersonal efforts by a seller to
Inform
Persuade or
Remind a target audience.

Promotion includes:

Personal Selling
Advertising
Sales Promotion
Public Relations (PR)

Personal Selling
Direct presentation of a product to a
prospective customer by a
representative of the organization
selling it.
Face to face
Over the phone

Advertising
The non-personal communication of
information usually paid for & usually
persuasive in nature, about products
(goods & services) or ideas by identified
sponsor through various media.

Broadcast media (TV, Radio)


Print media (newspapers, magazines)
Outdoor media (billboards)
Internet
Mobile phones
Other media

Sales Promotion
Incentives given to encourage sales and
help personal selling.

Premiums
Event sponsorships
Contests
Trade shows
In-store displays, samples, rebates
Discounts and coupons

If given to channel partners:

Promotion

Trade

Public Relations
Efforts to develop favorable attitudes
and opinions about
products/organizations
Newsletters
Annual reports
Lobbying, charitable events etc.

Publicity
News stories about organization &
products

Marketing Concept - The 4 Ps & The 4


Cs
Marketing
Mix
Place

Product

Customer
Solution

Convenience
Price

Customer
Cost

Promotion

Communication

Marketing Concept - The 4 Ps

The extended marketing


mix
Also called the service marketing mix
People
Process
Physical Evidence

STP
Segmentation
Targeting
Positioning

MARKETING

WHAT IS MARKETING?

Simple definition:

Marketing is the management process


responsible for identifying, anticipating,
and satisfying customer requirements
profitably. (CIM,2001)

Goals:
1. Attract new customers by promising
superior value.
2. Keep and grow current customers by
delivering satisfaction.

WHAT IS MARKETING?

Marketing is the activity, set of


instructions, and processes for
creating, communicating,
delivering, and exchanging
offerings that have value for
customers, clients, partners, and
society at large.

OLD view of
marketing:

NEW view of
marketing:

Making a sale
telling and
selling

Satisfying
customer needs

WHAT IS MARKETING?

WHAT IS MARKETED?

GOODS

PLACES

SERVICE
EXPERIENCES
S
EVENT
S
PERSONS

PROPERTIE
S

INFORMATION

ORGANIZATION
S

IDEAS

WHAT IS MARKETED?

GOODS

PLACES

SERVICE
EXPERIENCES
S
EVENT
S
PERSONS

PROPERTIE
S

INFORMATION

ORGANIZATION
S

IDEAS

RED & SPORTS CAR