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Marketing is everywhere, it touches all of us every day of our lives It is embedded in everything we do, from the clothes we wear to websites we click on!
There will always be a 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
MARKETING
Marketing starts with the buyer and focuses constantly on the needs of the buyer
2. Seeks to quickly convert products into cash 3. Concerns itself with the tricks and techniques of getting the customer to part with their cash for products available with the salesman
4. Views business as goods producing process
Seeks to convert customer needs into products Emphasizes on fulfilling the needs of the customer
MARKETING
Consumer determines the price, price determines the cost
10. Transportation, storage and other Distribution is seen as a vital distribution functions are seen as function keeping customers mere extensions of the production convenience in focus function
11. Different departments operate as All departments operate in an highly separate water tight compartments integrated manner, the sole purpose being generation of customer satisfaction
12. Selling views customers as the last link in business Marketing views the customer as the very purpose of the business, sees the business from the point of view of the customer
Marketing in Practice
Marketing is far too important to leave to the marketing department David Packard of Hewlett Packard
What is Marketing?
Marketing is meeting needs profitably Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders American Marketing Association
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.
What is Marketed?
Goods Services Events & Experiences Persons Places & Properties Organizations Information Ideas
What is marketed?
Goods Physical products like automobiles, electronic goods, cosmetics, machines etc (Durables and non durables) Services As economies advance a growing proportion of their economies focus on marketing of services. Hotels, airlines, doctors, teachers, bankers, management consultants, engineers etc provide service Events Time based events, trade shows, artistic performances, sporting events, company anniversaries etc Experiences Marketing an experience, example a theme restaurant, an amusement park ride, bungee jumping etc
What is marketed?
Persons Celebrity marketing, marketing for presidential candidate, Artists, CEOs, high profile lawyers, financiers, all get help from celebrity marketers. Abishek Bachchan has got a 8 crore payment for first 8 shoot of What an idea sirji campaign of Idea mobile services. It shows how well Abishek has marketed himself to get such high payments Places Cities, states, regions, nations etc are marketed to attract companies, tourists, new residents etc. Gujarat is marketed as Vibrant Gujarat, India Incredible India Properties Properties here refer to real estate example Ambi valley, Sahara City or financial property like stocks and bonds. Organisations Organisations actively work to build strong image in the minds of the customers. Philips Sense and Simplicity
What is marketed?
Information Books, magazines, newspapers, TV news channels. Even companies selling physical products attempt to add value by the use of information. Idea - Every market offering includes a basic idea. Charles Revson of Revlon has observed, In the factory we make cosmetics; in the store we sell hope . Social marketers are promoting ideas about encouraging family planning, discouraging smoking etc.
Who Markets
Marketer - A person or organization seeking a response attention, purchase, vote, donation from a potential customer or prospect. Marketers are skilled at stimulating demand for a company's product offering's). Marketing Managers seek to influence the level, timing, and composition of demand to meet the organization's objectives
Demand States
Negative Nonexistent Latent
Declining
Irregular
Full
Overfull
Unwholesome
Demand states
Negative Demand - Customers dislike a product offering and may pay a price to avoid it. Example - Products tested on animals (people concerned about animal welfare), products using animal fat (for vegetarians) Nonexistent Demand - Customers may be unaware or uninterested in a product offering - funeral plot , family planning operation Latent Demand - Customers may share a strong need that cannot be satisfied by an existing product offering. Example - Alternative energy car; strong need for a drug to fight Parkinson's disease.
Demand states
Declining / falling Demand - Customer begin to buy a product offering less frequently or not at all. example Opel car of GM not doing well Irregular demand - Customer purchases vary on seasonal, monthly, daily or even hourly basis. Example Hotels, airlines are in demand during holiday periods Full demand - Customers are adequately buying all product offerings put into the marketplace. Example Hindustan Unilever sells a variety of different products, and all are in demand (Lux, pears, ponds etc.)
Demand states
Overfull demand - Too many customers would like to buy a product offering. Example Petrol, oil (Demarketing*- Save Oil) Unwholesome demand - Customers may be attracted to product offerings that have undesirable social consequences. Example Cigarettes
Needs, wants, and demands Product, Market Target markets, positioning, segmentation
Marketing Concepts
Needs - a human need is a state of felt deprivation Stated need The consumer wants an inexpensive car Real need The consumer wants a car whose operating cost is low Unstated need Consumer expects good service from the dealer Delight needs The consumer would like an onboard navigation system Secret needs The customer wants his friends to see him as a savvy consumer Want The form taken by human need as they are shaped by culture and individual personality Demand Human wants backed by buying power Product A product is anything that can be offered to a market for attention, acquisition, use or consumption Market A set of actual and potential buyers of a product Exchange The act of obtaining a desired object from someone by offering something in return Target Markets, Positioning and segmentation A marketer can rarely satisfy everyone in a market, therefore marketers start by dividing the market into segments
Marketing Concepts
Value and satisfaction The offering of the company will be successful if it delivers value and satisfaction to the target buyer. Value reflects the sum of perceived tangible and intangible benefits and cost to the customers. It is primarily a combination of quality, service and price Marketing channels To reach the target markets, the marketer uses three kinds of marketing channels communication channels, distribution channels and service channels
Positioning Luxury of a car and thrill of a SUV Press ads of the Scorpio focused on the functional features of the vehicle and the television ads focused on emotional benefits.
Marketplace (physical stores, departments) Marketspace (digital, online) Metamarket (A cluster of complimentary products and services that are closely associated in the minds of the customer. The automobile meta market consists of automobile manufacturers, used car dealer, financing companies, insurance companies, service shops, auto sites on the internet, spare part shops etc )
www.marutitruevalue.com
Business Markets
Consumer Markets Companies selling mass consumer goods and services such as soft drinks, soaps etc. Much of the brand strength depends on developing a superior brand image, ensuring its availability, and backing it with suitable communication (Advertising plays a big role) Example food grains, dairy products, Airline tickets Business Markets Companies selling business goods and services to businesses often face well trained, well informed buyers who are skilled in evaluating competitive offerings (Advertising can play a role but the sales force, price, and the companys reputation for reliability is important) Example Industrial chemicals and adhesives Global Markets Companies selling goods and services in global market place face additional challenges. They must decide which countries to enter, entry mode, pricing in different regions, adapting communications to different cultures etc Example - Sony, Procter and Gamble
Nonprofit and Governmental Markets Companies selling their goods to such markets need to price their services carefully as these buyers have limited purchasing power. Example CRY
Information Technology: Digital revolution has created an information age. The industrial age was characterized by mass production & consumption, high inventory, rampant advertising and high discounting. The information age promises accurate level of production, targeted advertising & rational pricing. Todays business is carried over internet, Intranet and extranet. Globalization: Technologies advances in transportation and communication has made it easier for the companies to market in other countries and for the consumer to purchase from markets in other countries. Deregulation: Many countries have de regulated industries to create competition and greater opportunities. E.g. Tele communication Industry in India. Privatization: Countries have converted Public companies to private companies or increase their stake to improve their efficiency.
Heightened Competition: Big brands are facing competition from forging as well as domestic brands, resulting in more advertising and promotion costs and shrinking margins. This is aggravated by the powerful retailers who are now marketing their own brands over the limited shelf space. Industry Convergence: The companies are realizing the opportunities for back word and forward integration & therefore the industry boundaries are blurring at a increasing speed. Once chemical, now pharmaceutical companies are going into biotech research for more control and profit. Same is the case with IBM and Wipro who are offering total solution. Retail Transformation: Big retailers are giving tough time to small family shop because of the price advantage and variety offered. At the same time the big retailers are challenged by catalogue houses, direct mail order by news paper, telephone, internet, home shopping TV and e commerce on the internet. To counter this the malls are offering coffee shops and children play area to offer a total shopping experience.
Consumer Resistance: Excessive marketing and hard sell are resulting in consumers rejecting the products Disintermediation: The early success of Yahoo, Amazon etc, for online dot.com has threatened the traditional model Distributor, whole seller, retailers. E.g. Dell Direct. Many established companies are now also making their products online to take benefit of the new economy.
A substantial increase in buying power A 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 An amplified voice to influence public opinion
Internet Research Speed of internal information Speed of external information buzz Better target marketing Mobile marketing Differentiated goods Improved purchasing, recruiting, training, and
communications
Company Orientations
Production Product
Selling
Marketing
Production Concept It is one of the oldest concepts in business. It holds that consumers will prefer products that are widely available and inexpensive (Maximize output and achieve a lower unit cost) . Managers of production oriented companies concentrate on achieving high production efficiency and distribution. Henry ford believed that if the cost is reduced, more people would buy Ford Model T. He did not bother about the consumer preferences and even joked that customers can have ford in any color provided it is black!
Product concept proposes that consumers favor products that offer the most quality performance or innovative features A product oriented firm fails to achieve great marketing success despite turning out a quality product due to failure in determining the needs of the customer For example an organization may bring out a new modified version of mouse trap for mice menace but the customer may want a better solution and not a better mouse trap
It can lead to marketing myopia
Selling concept This concept holds that consumers if left alone will not buy enough of the organizations products. The organization must therefore undertake an aggressive selling and promotion effort Firms producing products which have non-existent demand usually follow this strategy, for example Encyclopedias, insurance etc
Marketing Concept - It emerged in the mid-1950s, Instead of a product centered philosophy, business shifted to customer centered sense and respond philosophy
Reactive market orientationunderstanding and meeting consumers expressed needs. Proactive marketing orientationresearching or imagining latent consumers needs through a probeand-learn process.
Companies that practice both reactive and proactive marketing orientation are implementing a total market orientation.
Dell computers does not produce a perfect computer for the target market, rather provides a product platform on which each person customizes the features he desires in the computer
Their products reflect customer needs and represent solution to customers problems as reflected by Nokias cell phones and Tatas Ace Mini truck Their products are perceived as superior to competition. The superiority is achieved through developments of new features, better technology, superior performances or superior service. Other examples are Kingfisher airlines (first airline to offer personal entertainment system to all passengers), Apple, Tatas Nano, Google It also includes process innovation example IBN news channel which was first to involve viewers in news production Logistics firm FedEx , in 2006 introduced smart package which is used for transporting human organs.
Apple GE Toyota Motor Procter and Gamble FedEx Johnson & Johnson Microsoft Wal-Mart stores Berkshire Hathaway Honda Motor
Gold
Iron
Lead
What segment costs us in time, effort and money yet does not provide the return we want? What segment is difficult to do business with?
Integrated Marketing
The Marketers task is to create, communicate and deliver value for the customer McCarthy classified these activities as marketing mix tools of 4 broad kinds which he called the 4 Ps of Marketing Product, Price, Place and Promotion
The Four Ps
1-48
From the buyers point of view, the four dimensions which represent customer value are indicated by the acronym SIVA Solution How can I solve my problem? Information Where can I learn about it? Value What is the total damage/sacrifice? Access Where can I find it?
Performance Marketing
Social Initiatives Corporate social marketing Cause marketing Cause-related marketing Corporate philanthropy Corporate community involvement Socially responsible business practices
Corporate Philanthropy
Financial success often depends on marketing ability. Many firms have created a Chief Marketing Officer (CMO) to put marketing on an equal footing with other Chief Executives such as a CFO and CEO. Marketing is tricky and making the right decisions is not always easy. The functions of the CMO are Strengthening the brands Measuring marketing effectiveness Driving new product development based on customer needs Gathering meaningful customer insights Utilizing new marketing technology
Important questions
1. 2. 3. 4. 5.
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8.
What is Marketing ? Detail the differences selling and marketing. What is Marketed? Explain Metamarket with an example. What are the different demand states? Consider the societal forces noted in the chapter (e.g., information technology, globalization, deregulation, consumer resistance, retail transformation). How have marketing practices shifted to accommodate and even leverage these forces? What is different orientations towards the market place? What are the 4 Ps of Marketing? What is Holistic Marketing?