Marketing Management MKT 601
What is Marketing??
Selling? Advertising? Promotions? Making products available in stores? Maintaining inventories?
All of the above, plus much more!
Marketing = ?
Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services to create exchanges that satisfy individual and organizational goals
American Marketing Association
Marketing = ?
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.
Simple Marketing System
Communication
(a collection of sellers)
Industry
Goods/services
Money
(a collection of Buyers)
Market
Information
Marketing = ?
Marketing is the sum of all activities that take you to a sales outlet. After that sales takes over. Marketing is all about creating a pull, sales is all about push. Marketing is all about managing the four Ps
product price place promotion
The 4 Ps & 4Cs
Marketing Mix Product Customer Solution Convenience Place
Price Customer Cost
Promotion Communication
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Difference Between - Sales & Marketing ?
Sales
trying to get the customer to want what the company produces
Marketing
trying to get the company produce what the customer wants
Scope What do we market
Goods Services Events Experiences Personalities Place Organizations Properties Information Ideas and concepts
Core Concepts of Marketing
Based on : Needs, Wants, Desires / demand
Products, Utility, Value & Satisfaction Exchange, Transactions & Relationships Markets, Marketing & Marketers.
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Core Concepts of Marketing
Needs, wants demands
Products
Utility, Value & Satisfaction
Markets
Marketing & Marketers
Xchange, Transaction Relationships
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Core Concepts of Marketing
Need food ( is a must ) Want Pizza, Burger, French fry's ( translation of a need as per our experience ) Demand Burger ( translation of a want as per our willingness and ability to buy ) Desire Have a Burger in a five star hotel
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In order to understand Marketing let us begin with the
Marketing Triangle
Customers
Company
Competition
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Who is a Customer ??
CUSTOMER IS . . . . .
Anyone who is in the market looking at a product / service for attention, acquisition, use or consumption that satisfies a want or a need
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Customer
CUSTOMER has needs, wants, demands and desires Understanding these needs is starting point of the entire marketing These needs, wants arise within a framework or an ecosystem Understanding both the needs and the ecosystem is the starting point of a long term relationship
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How Do Consumers Choose Among Products & Services?
Value - the value or benefits the customers gain from using the product versus the cost of obtaining the product.
Satisfaction - Based on a comparison of performance and expectations.
Performance > Expectations => Satisfaction
Performance < Expectations => Dissatisfaction
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Customers - Problem Solution
As a priority , we must bring to our customers WHAT THEY NEED We must be in a position to UNDERSTAND their problems
Or in a new situation to give them a chance to AVOID the problems
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Customer looks for Value
Value = Benefit / Cost
Benefit
Cost
= Functional Benefit + Emotional Benefit
= Monetary Cost + Time Cost + Energy Cost + Psychic Cost
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Strategic Marketing
Strategic marketing management is concerned with how we will create value for the customer Asks two main questions
What is the organizations main activity at a
particular time? Customer Value
What are its primary goals and how will these be
achieved? how will this value be delivered
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Strategic Planning
Strategic Planning is the managerial process of creating and maintaining a fit between the organizations objectives and resources and the evolving market opportunities.
Also called Strategic Management Process All organizations have this Can be Formal or Informal
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The Strategic-Planning, Implementation, and Control Process
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Business Strategic-Planning Process
External environment (Opportunity &
Threat analysis)
Business Mission
Goal Formulation
Internal Environment
(Strength/ Weakness analysis)
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Strategy Formulation
Environmental Analysis Competitor Customer Supplier Regulatory Social/ Political Internal Analysis Technology Know-How Manufacturing Know-How Marketing Know-How Distribution Know-How Logistics Opportunities & Threats Strength & Weaknesses Identity Core Competencies
Identify opportunity
Fit internal Competencies with external opportunities
Firm Strategies
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The Marketing Plan
A written document that acts as a guidebook of marketing activities for the marketing manager
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CONTENTS of MARKETING PLAN
Business Mission Statement Objectives Situation Analysis (SWOT) Marketing Strategy Target Market Strategy Marketing Mix
Positioning Product Promotion Price Place Distribution
People Process
Implementation, Evaluation and Control
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The Marketing Process
Business Mission Statemen t Objective s Situation or SWOT Analysis
Marketing Strategy
Target Market Strategy
Marketing Mix
Product Promotion Place/Distribution Price
Implementation Evaluation, Control
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Marketing Environment
Why a product like radio declined and now once again emerging as an entertainment medium ?
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What Were the Drivers of This Change ? Technology ? Government policy ? Other media substitutes ?
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Why Market Leaders Suffered ?
HMT vs. Titan HLL vs. Nirma Bajaj vs. Honda [Link] boom, then bust and now resurgence Market leadership today cannot be taken for [Link] and more efficient companies are able to upstage leaders in a much shorter period.
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Factors Influencing Companys Marketing Strategy
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External Marketing Environment
External Environment is not controllable
Demographics Social Change Ever-Changing Marketplace
Product Distribution Promotion Price
Physical / Natural
Economic Conditions
Competition
Target Market
Political & Legal Factors
Environmental Scanning
Technology
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The macro-environment
is the assessment of the external forces that act upon the firm and its customers, that create threats & opportunities
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Product
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Product is . . . . .
Anything that is offered to the market for attention, acquisition, use or consumption that satisfies a want or a need
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Types of Products
PRODUCTS
Consumer Products
Services
Industrial Products
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Product Items, Lines, and Mixes
A specific version of a product that can be designated as a distinct offering among an organizations products.
Product Item
Product Line
A group of closely-related product items.
Product Mix
All products that an organization sells.
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Product Mix
Width how many product lines a company has
Length how many products are there in a product line
Depth how many variants of each product exist within a product line Consistency how closely related the product lines are in end use
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Gillettes Product Lines & Mix
Width of the product mix
Blades and razors
Fusion 5 blade Mach 3 Turbo Mach 3 Sensor Trac II Atra Swivel Double-Edge Lady Gillette Super Speed Twin Injector Techmatic
Depth of the product lines
Toiletries
Series Adorn Toni Right Guard Silkience Soft and Dri Foamy Dry Look Dry Idea Brush Plus
Writing instruments
Paper Mate Flair S.T. Dupont
Lighters
Cricket S.T. Dupont
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What is a Service? Defining the Essence
An act or performance offered by one party to another (performances are intangible, but may involve use of physical products) An economic activity that does not result in ownership
A process that creates benefits by facilitating a desired change in customers themselves, or their physical possessions, or intangible assets
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Some Industries - Service Sector
Banking, stock broking Health care
Lodging
Restaurants, bars, catering
Education
Wholesaling and retailing Laundries, dry-cleaning
Insurance
News and entertainment Transportation (freight and passenger)
Repair and maintenance Professional (e.g., law, architecture, consulting)
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Classification of Services
Banking
Pure Intangible Service
Good Transportation Major Service with Minor Product Business Hotels Product = Service Computers Major Product with Minor Services Materials / Components
Pure Tangible Product
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Major Characteristic of Services
Intangibility Services are intangibility cannot be seen, tasted, felt, heard or smelled before purchase. Inseparability - Services are produced and consumed simultaneously. Variability or Heterogeneity Services are highly variable Perishability Services cannot be stored.
Non Ownership - Services are rendered but there is no transfer of title
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The Marketing Mix
The conventional view of the marketing mix consisted of four components (4 Ps): Product, Price, Place/ distribution and Promotion. Generally acknowledged that this is too narrow today; now includes , Processes, Productivity [technology ]People [employees], Physical evidence Marketers today are focused on virtually all aspects of the firms operations that have the potential to affect the relationship with customers.
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The 8Ps of Integrated Service Management vs. the Traditional 4Ps
Product elements Place, cyberspace, and time Process Productivity and quality People Promotion and education Physical evidence Price and other user outlays
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The Give and Get of Marketing
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Great Words on Marketing
1. 2.
3. 4. 5.
The purpose of a company is to create a customerThe only profit center is the customer. A business has twoand only twobasic functions: marketing and innovation. Marketing and innovation produce results: all the rest are costs. The aim of marketing is to make selling unnecessary. While great devices are invented in the Laboratory, great products are invented in the Marketing department. Marketing is too important to be left to the marketing department.
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Drivers of Customer Satisfaction
Many aspects of the firms value proposition contribute to customer satisfaction:
The core product or service offered
Support services and systems The technical performance of the firm
Interaction with the firm and it employees
The emotional connection with customers
Ability to add value and to differentiate as a firm focuses more on the top levels
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Marketers and Markets
Marketers are focused on stimulating exchanges with customers who make up markets B2C or B2B. The market is comprised of people who play a series of roles: decision makers, consumers,
purchasers, and influencers.
It is absolutely essential that marketers have a detailed understanding of consumers, their needs and wants. Much happens before and after the sale to affect customer satisfaction
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Stages of Customer Interaction
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What Changed in Marketing
Old Economy
Organize by product units Focus on profitable transactions Look primarily at financial scorecard Focus on shareholders Marketing does the marketing Build brands through advertising Focus on customer acquisition No customer satisfaction measurement Over-promise, under-deliver
New Economy
Organize by customer segments Focus on customer lifetime value Look also at marketing scorecard
Focus on stakeholders Everyone does the marketing Build brands through performance Focus on customer retention Measure customer satisfaction and retention rate Under-promise, over-deliver
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Are Banks truly marketing-savvy and customer - centric?
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Myth 1 The larger the range of products, the more customer-centric I am.
Mythbuster The range of products has emerged from being competition-centric.
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Myth 2 Better technology (read CRM) leads to better customer service.
Mythbuster Technology alone does not deliver, helps people do.
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Myth 3 Launch a product and the customer will start
using instantly. - Give a customer a card and he will learn how to play with it immediately
Mythbuster Customers need To be educated too
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Myth 4 The only way to get a customer is from competition.
Mythbuster Customers are not only present where competition is.
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Myth 5 Just advertise and - You will sell.
Mythbuster Advertising will only sell, Not retain customers.
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Myth 6 No difference between marketing & selling
Mythbuster Selling focuses on the needs of the seller; marketing on the needs of the buyer.
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Myth 7 In the absence of relationships trust builds financial brands
Mythbuster Trust is not a differentiator at all it is the very minimum that the customer expects!!
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So what will the differentiators be :
Technology ?
Brand ?
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The real differentiator of customer centricity in a commoditised world of financial
products -
Customer Service !
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Thank You
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