Marketing Management Sub Code: 12MBA24

Recommended Books
Marketing Management: A South Asian Perspective- Kotler, Keller, Koshy & Jha, 13/e, Pearson Education, 2012 2. Marketing : An Introduction- Rosalind Masterson & David Pickton, 2/e, Sage Publications, 2010 3. Marketing Management- Ramaswamy V.S. & Namakumar S, 4/e, Macmillan Publishers, 2011 4. Fundamentals of Marketing Management- Etzel M.J, B J Walker & William J. Stanton, 14/e, TMH, 2012
1.
2

Reference Books
Marketing Management: Rajan Saxena, 4/e,

Cenage Learning Marketing- Lamb, Hair, Sharma Mc Danniel, 1/e, Cengage Learning, 2012 Marketing: Marketing in the 21st Century- Evans & Berman, 2/e, Cengage Learning, 2005 Marketing: Planning, Implementation, and Control- William M Pride, Ferrel O.C.,

Modules to be covered
Module 1: Introduction Module 2: Understanding Consumer Behaviour Module 3: Market Segmentation, Targeting,

Positioning & Branding Module 4: Product Decisions, Packaging/Labeling Module 5: Pricing Decisions Module 6: Distribution Decisions Module 7: Integrated Marketing Communications Module 8: Marketing Planning, Marketing Organisation, Marketing Audit.

Introduction
Module 1

Good Marketing is No Accident

The roaring success of Tata Ace,a mini-truck with the engine capacity of less than one ton launched by Tata Motors in 2005, was due to a deep understanding of the market needs and customer requirements.
6

Defining Marketing
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
More simply put, Marketing is the delivery of

customer satisfaction at a profit. In other words marketing is meeting needs profitably.

7

The American Marketing Association offers the following formal definition :

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 stake holders.

Evolution Of Marketing
Tribes Barter System Industrial Revolution

Relationship Era

Production Era

Marketing Era
9

Sales Era

What is Marketed?
Goods Services Events Experiences Persons

Places
Properties Organizations

Information
Ideas
10

Goods
GOODS: Physical goods constitute the bulk of most countries production and marketing effort. o Each year, Indian companies alone market billions of fresh, canned, bagged, and frozen food products and millions of cars, refrigerators, television sets, machines, and various other mainstays of a modern economy.

11

Services
SERVICES: As economies advance, a growing proportion of their activities is focused on the production of services. The U.S economy today consists of a 70-30 services-togoods mix. Services includes the work of airlines, hotels, car rental firms, barbers and beauticians, maintenance and repair people, as well as professionals working within or for companies, such as accountants, bankers, lawyers, engineers, doctors, software programmers, and management consultants. Many market offerings consist of a variable mix of goods and services. At a fast-food restaurants, for example, the customer consumes both a product and a service.

12

Events
EVENTS: Marketers promote time-based events, such as major trade shows, artistic performances, and company anniversaries. Global sporting events such as the Olympics or World Cup are promoted aggressively to both companies and fans. There is a whole profession of meeting planners who work out the details of an event and make sure it comes off perfectly aggressively to both companies and fans.

13

Experiences
EXPERIENCES: By Orchestrating several services and goods, a firm can create, stage, and market experiences. Walt Disney Worlds Magic Kingdom represents experiential marketing :Customers visit a fairy kingdom, a pirate ship, or a haunted house.

14

Persons
Celebrity marketing is a major business. Today, every

major film star has an agent, a personal manager, and ties to a public relations agency. Artists, musicians, CEOs, physicians, high-profile lawyers and financiers, and other professionals are also getting help from celebrity marketers. Some people have done a masterful job of marketing themselves think of Madonna, Oprah Winfrey, the Rolling Stones, Aerosmith, and Michael Jordan, Management consultant Tom Peters, himself a master at self-branding, has advised each person to become a brand.
15

Places
Cities, States, regions, and whole nations

compete actively to attract tourists, factories, company headquarters, and new residents. Place marketers include economic development specialists, real estate agents, commercial banks, local business associations and advertising and public relations agencies.

16

operties
PROPERTIES: are intangible rights of ownership of either real property (real estate) or financial property (stocks and bonds). Properties are bought and sold, and this requires marketing.
Real estate agents work for property owners or

sellers or buy residential or commercial real estate. Investment companies and banks are involved in marketing securities to both institutional and individual investors.
17

Organizations
ORGANIZATIONS actively work to build a strong, favorable, and unique image in the minds of their target publics. Companies spend money on corporate identity ads. Philips, the Dutch electronics company, puts out ads with the tag line Lets Make Things Better. In the United Kingdom, Tescos Every Little Bit Helps marketing program has vaulted it to the top of the supermarket chains in that country. Universities, museums, performing arts organizations, and nonprofits all use marketing to boost their public images and to compete for audience and funds.
18

Information
INFORMATION can be produced and marketed as a product. This is essentially what schools and universities produce and distribute at a price to parents, students, and communities. Encyclopedias and most nonfiction books market information. Internet search engines such as Google, Wikipedia etc peddle information. The production, packaging, and distribution of information is one of our societys major industries. Even companies that sell physical products attempt to add value through the use of information.

19

Ideas
IDEAS: Every market offering includes a basic idea. Charles Revlon of Revlon observed : In the factory, we make cosmetics; in the store we sell hope. o Products and services are platforms for delivering some idea or benefit.

20

Nature, Scope and Importance

Marketing is managing profitable customer

21

relationships. The basic objective of marketing is to attract new customers by promising and offering superior value and to retain and grow current customers by delivering satisfaction. Building customer relationships based on customer value and satisfaction is at the very core of modern marketing. Highly successful companies know that if they take care of their customers, market share and profits will follow. Sound marketing is essential for the success of every company, whether large or small, global or

Needs, Wants and Demand

Needs Needs are the basic human

requirements. People need food, air, water, clothing, and shelter to survive. People also have strong needs for recreation, education, and entertainment.

Wants Wants are the forms human needs take

as they are shaped by culture and individual personality characteristics. The need become wants when they are directed to specific objects that might satisfy the need.
purchasing power and willingness to buy, they become demands. Demands are wants for specific products backed by an ability to pay.

Demands When human wants are backed by

22

Maslows Hierarchy of Needs

 Marketing and Maslows Need Hierarchy Physiological needs (Eg: Thanda Matlab Coca

Cola, Kellogs cereal rich breakfast provides you with a rich food, Quaker Oats: Eating oatmeal is good for your heart) Safety Needs (Ads of Insurance Companies) Social needs ( Eg: BPL mobile helps you to keep in touch with family and friends wherever they are, J C Penney: Wherever teens gather, youll hear it. Its the language of terrific fit and fashion.)
24

 Esteem Needs (E g: Ownership of omega watch

is a sign of excellence. Ad of BMW: The Ultimate Driving machine stresses power, an egoistic need, Ad of Esteem: Life is full of twists and turns. Arent you glad you drive an esteem. Cadillac: Those long hours have paid off. In recognition, financial success, and in the way you reward yourself. Isnt it time you owned a Cadillac? ) Self-actualization needs ( E g: IGNOU: Distance education programme, encourages you to further your knowledge)

Marketing Orientations
The Production Concept It holds that consumers will prefer products that are widely

available and inexpensive. Managers of production oriented businesses concentrate on achieving high production efficiency, low costs and mass distribution.

The Product Concept It holds that consumers will favor those products that offer

the most quality, performance, or innovative features. Managers in these organizations focus on making superior products and improving them over time.

26

 The Selling Concept

It holds that consumers and businesses, if left alone, will ordinarily not buy enough of the organizations products. The organization must, therefore, undertake an aggressive selling and promotion effort. The aim is to sell what they make rather than make what the market wants.

The Marketing Concept

This concept emerged in the mid-1950s. Instead of a productcentered, make-and-sell philosophy, business shifted to a customer-centered,sense-and-respond philosophy. The job is not to find the right customers for your products, but the right products for your customers. This concept holds that the key to achieve organizational goals consists of the company being more effective than competitors in creating, delivering, and communicating superior customer value to its chosen target markets.

27

 The Holistic Marketing Concept:

It is based on the development, design, and implementation of marketing programs, processes and activities that recognizes their breadth and interdependencies. It recognizes that everything matters with marketing- and that a broad, integrated perspective is often necessary. The 4 components of Holistic Marketing are: 1. Relationship Marketing 2. Integrated Marketing 3. Internal Marketing 4. Social Responsibility Marketing

28

29

Relationship Marketing
Relationship Marketing: Increasingly, a key goal of marketing is to develop deep, enduring relationships with all people or organizations that could directly or indirectly affect the success of the firms marketing activities.
Relationship Marketing has the aim of building

mutually satisfying long-term relationships with key parties customers, suppliers, distributors, and other marketing partners in order to earn and retain their business. Relationship marketing builds strong economic, technical, and social ties among the parties.
30

Integrated Marketing Mix

INTEGRATED MARKETING The Marketers task is to devise marketing activities and assemble fully integrated marketing programs to create, communicate, and deliver value for consumers. The marketing program consists of numerous decisions on value-enhancing marketing activities to use. Marketing activities come in all forms.
One traditional depiction of marketing activities is in

31

terms of the marketing mix, which has been defined as the set of marketing tools the firm uses to purpose its marketing objectives. McCarthy classified these tools into four broad groups, which he called the four Ps of marketing : Product, Price, Place and Promotion

Marketing Mix

Product Quality Design Features Functionality Brand Name Product variety Packaging Sizes Services Warranties Returns

Target Market

Place Channels Coverage Assortments Locations Inventory Transport Promotion Sales Promotion Advertising Personal selling Public Relations Direct Marketing

Price Pricing strategy List Price Discounts Allowances Payment period Credit terms

32

The Four P Components of the Marketing Mix

The Four Ps

The Four Cs
Marketing Mix

Product

Place

Customer Solution

Convenience Price

Promotion

Customer Cost
33

Communication

Internal Marketing
Holistic Marketing incorporates INTERNAL MARKETING, ensuring that everyone in the organization embraces appropriate marketing principles, especially senior management.
Internal

marketing is the task of hiring, training, and motivating able employees who want to serve customers well. Marketing activities within the company can be as important as, or even more than marketing activities directed outside the company. It makes no sense to promise excellent service before the companys staff is ready to provide it.

Internal marketing must take place on two levels.

34

At one level, the various marketing functions sales force, advertising, customer service, product management, marketing, research must work together. At the other level all the marketing functions must be coordinated from the customers point of view.

Social Responsibility Marketing (Performance Marketing)

SOCIAL RESPONSIBILITY MARKETING: Holistic Marketing incorporates Social Responsibility Marketing and understanding broader concerns and the ethical, environmental, legal, and social context of marketing activities and programs. The cause and effects of marketing clearly extend beyond the company and the consumer to society as a whole. Social responsibility also requires that marketers carefully consider the role that they are playing and could play in terms of social welfare.

35

The Societal Marketing Concepts holds that the organizations task is to determine the needs ,wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumers and the societys well-being
36

Marketing & Sales Concepts Contrastedeting & Sales Concepts Contrasted

37

Selling Vs Marketing
Selling starts with the seller and concerned with the

38

sellers needs whereas Marketing starts with the buyer and concerned with the buyers need. In Selling, the Core of business activity is the seller whereas in Marketing, Buyer is the core of all activity. Selling converts existing products into money whereas Marketing converts customer needs into products. Selling views Business as a goods-producing process whereas Marketing views Business as a customersatisfying process. In Selling, Marketing mix is planned as per sellers need, whereas in Marketing, Customer dictates the plan of marketing mix.

 In Selling, different departments of the business

act independently ,whereas in Marketing, all departments work in an integrated way to satisfy the customer In Selling, Production is the central function of business whereas in Marketing, the central function of business is Marketing In Selling, Customer is the last link in Business ,whereas in Marketing, Customer is the very purpose of Business.
39

Scanning and Analysing The Environment

Environmental Scanning gives companies advantage over

competition by taking advantage of changing trends. Scanning requires observation, collecting information and analysis involves assessing and interpreting the gathered information so that the opportunities and threats arising from the environmental factors can be properly understood and strategies formulated accordingly.

Marketing Environment
The actors & forces outside marketing that affect marketing managements ability to build & maintain successful relationships with target customers

Definition and Concepts

A companys marketing environment consists of the actors and

forces outside marketing that affect managements ability to build and maintain successful relationships with target customers. (Philip Kotler)

The microenvironment consists of the following actors close to the

company that affect its ability to serve its customers: (1) The Company (2) The Suppliers (3) The Marketing Intermediaries (4) The Customers (5) The Competitors (6) The Public.
The macro environment consists of the following larger societal

forces that affect the microenvironment: (1) Demographic (2) Economic (3) Socio-cultural(4) Natural (5) Technological(6) Political-Legal

Micro Environment
Micro environment- The actors close to the company that affect its ability to serve its customers the company, suppliers, marketing intermediaries, customers, competitors & publics

Micro Environment
It consists of the actors close to the company that affect its ability to serve its customers

Micro environment

Macro Environment
The larger societal forces that affect the microenvironment- demographic, economic, natural, technological, social-cultural & politicallegal forces

Macro Level Influences that affect all firms

Analyzing the Microenvironment

The Company
In the Company, marketing managers, in formulating

plans, must take into account the other groups such as top management, finance, R&D, purchasing, manufacturing and accounting
The Suppliers
Suppliers form an important link in the companys overall

customer value delivering system. They provide the resources needed by the company to produce its goals and services. Price changes, supply shortages, labour strikes, and other events can interfere with the fulfillment of delivery promises to customers and lose sales in the short run and damage customer relationships in the long run.
46

 The Marketing Intermediaries

Marketing intermediaries are firms that aid the company

in promoting, selling and distributing its goods to the final buyers. Middlemen are business firms that help the company find customers and/or close sales with themagents, brokers, dealers, wholesalers, retailers and so on.
The Customers
Customers of the company belong to Consumer Markets,

Industrial Markets, Reseller Markets, Government Markets and International markets. The tastes and preferences of customers keep on fluctuating. Customers brand loyalty keep changing. Only by studying the market demand and customer-0related factors on a regular basis can marketers carry out their business activities successfully.
47

 The Competitors
The companys marketing system is surrounded

and affected by a host of competitors. These competitors have to be identified, monitored to gain and maintain customer loyalty. Competitive advantage is a superior or distinctive competence of the company relative to competition in a specific area. The Publics
The company must also acknowledge a large group of

48

publics that take an interest in its method of doing business. A public can facilitate or impede the ability of an organization to accomplish its goals. There are various types of Public, namely, financial, media,

Analyzing the Macroenvironment

Identifying the Major Forces
Demographic Economic Socio-cultural

Natural
Technological Political-legal

49

Demographic Environment
Worldwide Population Growth Population Age Mix

Ethnic Markets
Educational Groups Household Patterns Geographical Shifts in Population

 Economic Environment
Income Distribution Savings, Debt and Credit Availability Outsourcing and Free Trade

51

 Social- Cultural Environment

Society shapes the beliefs, values, and norms that

largely define consumer tastes and preferences. People absorb, almost unconsciously, a world view that defines their relationships to themselves, to others, to organizations, to society, to nature, and to the universe. High Persistence Of Core Cultural values Existence Of Subcultures Shifts Of Secondary Cultural Values Through Time

52

 Natural Environment
Shortage Of Raw Materials Increased Energy Costs Anti-Pollution Pressures Changing Role Of governments

53

 Technological Environment
Accelerating Pace Of Change Unlimited Opportunities For Innovation Varying R& D Budgets Increased Regulation Of Technological Change

54

 Political-Legal Environment
Increase In Business Legislation Growth Of Special- Interest Groups Consumer Protection Act,1986 Safety Information Choice Representation Redressal Consumer education

55

Consumer Protection Act, 1986

Right to Safety: To be protected against the sale of

goods and services which are spurious/hazardous for the life. Right to Information: To know the quality, quantity, weight and the price of goods/services being paid for, so that one is not cheated by unfair trade practices. Right to Choose: To be assured, wherever possible, access to a variety of goods and services at competitive prices. Right to be Heard: To be heard and to be assured that the interest would receive due consideration at appropriate forums Right to Seek Redressal: To seek legal redressal against unfair or restrictive trade practices or exploitation. Right to Consumer Education: To have access to consumer education

Responding to the Marketing Environment

Many companies view the marketing environment as an

uncontrollable element to which they must adapt. On the other hand there are companies who take aggressive actions to affect the publics and forces in their marketing environment.
Marketing managers cannot always control environment forces.

But whenever possible, they should take a proactive approach to the marketing environment.

Difference b/w consumer and customer

Generally, a consumer refers to individuals who

buy for themselves or their family (hence the term 'consumerism' in economics and politics), whereas a customer can also mean the retailer or person who buys from the manufacturer, etc. for ultimate sale to others. The one who buys the product is called a customer and the who uses the product is called a consumer. -A customer is who buys the things but a consumer is the person who finally utilizes it.

The Marketing Process

Analyzing market opportunities Selecting target markets Developing the marketing mix Managing the marketing effort

59

The Marketing Process

60

Marketing Management Tasks

Developing Marketing Strategies And Plans

Capturing Marketing Insights

Connecting With Customers Building Strong Brands Shaping The Market Offerings Delivering Value Communicating Value Creating Long-Term Growth

61

The New Marketing Realities

Major Societal Forces
Network information technology Globalization Privatization Heightened competition

Consumer resistance
Retail transformation

62

 New Consumer Capabilities

A substantial increase in buying power A greater variety of available goods and services 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 peer and public opinion
63

New Company Capabilities

CRM
CRM Customer relationship management . . is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.
It costs 5 to 10 times MORE to attract a new customer

than it does to keep a current customer satisfied.