1. Introduction to Marketing Management
Chapter 1

2. Marketing function Four P’s in marketing
Different concepts in marketing
Production concept
Product concept
Selling concept
Marketing concept
Societal and holistic concept

3. Marketing demand Method of demand fprecasting
Survey of buyers’ intention
Sales force opinion
Expert opinion
Market test
Time series analysis
Statistical demand analysis

4. Market segmentation Meaning Importance
Different bases of market segmentation with reference to consumer product and industrial product

5. What is 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.

6. What is Marketing management ?
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.

7. What is marketed ? Goods Services Events Experiences Persons Places
Properties
Organizations
Information
Ideas

8. What is marketed ? Goods Services Events
Cars, electronic items, industrial chemicals etc
Services
Airlines, hotels, Banking, beauticians, doctor
Events
World Cups, Award Functions, Olympics

9. What is marketed ? Experiences Persons Places
Amusement park, water park, theme restaurant
Persons
Celebrity Marketers
Places
Cities, State and Nations

10. What is marketed ? Properties Organizations Information Ideas
Real Property, Financial Property
Organizations
Universities, Non Profit organization
Information
Discount, Offers, Change
Ideas
Child Labor, Discouraging Smoking, education

11. Four P’s in Marketing
Product
Price
Promotion
Place

12. Place Product Price Promotion Marketing Mix Channels Coverage
Assortments
Locations
Inventory
Transport
Product
Quality
Design
Features
Packaging
Sizes
Services
Warranties
Return
Variety
Price
Price list
Discounts
Allowances
Payment Period
Credit terms
Promotion
Sales Promotion
Advertising
Sales Force
Public relations
Direct Marketing
Online advertising

13. Different concepts in marketing
The Production Concept
The Product Concept
The Selling Concept
The Marketing Concept
The societal and holistic Concept

14. The Production Concept
Oldest concept in business
Consumer prefer products that are widely available and inexpensive
Businesses concentrate on achieving high production efficiency, low costs and mass distributions
Applicable for developing countries and also in expanding market
E.g. inexpensive toys, electronics

15. The Product Concept
Products with high quality, performance or innovative features
Managers focus on superior products and improving them over the time
Little or no customer input
Rarely examine competitor’s product
For success it’s necessary to be perfectly priced, distributed, advertise and sold properly
Leads to marketing myopia
E.g HMT, ambassador car

16. Marketing myopia Ignoring the demand, taste and liking of consumer
Looking into mirror than looking out
Colored and crooked perception of marketing
Short sightedness about business
Excessive attention to production
Obsession with the product
Inadequate understanding of market

17. The Selling Concept
Consumers and businesses if left alone will not buy enough
It undertake an aggressive selling and promotion effort
The selling concept is practiced most aggressively with unsought goods that buyers normally don't think of buying such as insurance.
Sell more stuff to more people for more profit
Many use it at the time of over capacity or competition
E.g. consumer durables

18. The Marketing Concept Customer – centric concept
Reactive market orientation and proactive marketing orientation
More effective than competitors in creating, delivering and communicating superior customer value
Fulfilling buyer’s needs
HP and Motorola have made a practice of researching latent need through a :Probe – and – learn” process.

19. Selling concept Marketing concept
Start Focus Means End
Factory Products Selling & Profit through
promotion high sales volume
Marketing concept
Customer Customer Integrated Profit through
needs marketing customer satisfac

20. Distinction between marketing and selling
Focuses on customer’s needs
Customer enjoys supreme importance
Product planning and development to match products with markets
Integrated approach achieve long term goals
Converting customer’s needs into products
Focuses on seller’s nee ds
Product enjoys supreme importance
High pressure selling to sell goods already produced
Fragmented approach to achieve immediate gains
Converting products into cash

21. Marketing Selling Let the seller beware principle is followed
Profits through customer satisfaction
Let the buyer beware principle is followed
Profits through sales volume

22. The societal and and holistic Concept
The societal marketing concept calls upon marketers to build social and ethical considerations into their marketing practices. They must balance and juggle the often conflicting criteria of company profits, consumer want satisfaction, and public interest. Yet a number of companies have achieved notable sales and profit gains by adopting and practicing the societal marketing concept.

24. To determine the needs, wants and interest of the target market and deliver the desired satisfaction that preserves the society’s well being
They see it as affording an opportunity for companies to enhance their corporate reputation, raise brand awareness, increase customer loyalty, build sales, and increase press coverage. They believe that customers will increasingly look for demonstrations of good corporate citizenship. Smart companies will respond by adding “higher order” image attributes than simply rational and emotional benefits.
Environment deterioration

25. Marketing demand Method of demand fprecasting
Survey of buyers’ intention
Sales force opinion
Expert opinion
Market test
Time series analysis
Statistical demand analysis

26. Demand forecasting
Demand forecasting means expectations about the future course of the market demand for the product.

27. Survey of buyer’s intention method
A firm can determine the demand for its products through a market survey. It may launch a new products, if the survey indicates that there is a demand for that particular product in the market.
For example, Coke in India expanded its product range beyond carbonated drinks, after the company conducted a nation wide survey. The survey revealed that about 80% of the youth preferred to drink tea or coffee rather than carbonated drinks at regular intervals. The remaining 20% preferred to have milk products while only 2% preferred to drink carbonated drinks like coke.
The company is now trying to bring tea and coffee brands to India by installing vending machines. It is also planning to introduce a coconut flavored drink in kerala and a black currant in Tamilnadu named portello.

28. Merits of survey of buyer’s intention method
The forecast comes straight from the horse’s mouth – the customer himself and hence more reliable.
It gives readymade forecast user-wise and user industry-wise.

29. Demerits of survey of buyer’s intention method
It is expensive.
It is time consuming.

30. Sales force opinion method
Sales forecasts are made on the basis of the opinion of the salesmen or top management in the respective areas.
Salesmen are more in personal contact with the customers, their opinions and estimates can be more reliable.

31. Merits of salesforce opinion method
Demerits of salesforce opinion method
It is easy and simple.
As salesmen’s opinions are used for sales forecasting they do feel that their importance is accepted by the management.
The forecasts developed by this method have greater stability and reliability because of the largeness of the sample.
Their opinions cannot be of much use if their knowledge is limited.
Salesmen are certainly not experts in forecasting, they cannot use sophisticated techniques.

32. Expert Opinion method
The expert opinion method, also known as “EXPERT CONSENSUS METHOD”, is being widely used for demand forecasting.
This method utilizes the findings of market research and the opinions of management executives, consultants, and trade association officials, trade journal editors and sector analysts. When done by an expert, qualitative techniques provide reasonably good forecasts for a short term because of the expert’s familiarity with the issues and the problems involved.
DELPH I METHOD:- The Delphi method is primarily used to forecast the demand for “NEW PRODUCTS”.

33. Merits of expert opinion method Demerit of expert opinion method
As expert’s knowledge is used, forecasting will be accurate.
It is also suitable where past record of sales is not available or a new product is to be introduced.
It is time consuming.
It is expensive.

34. Market Test method
In this case, a test area is selected, which should be a representative of the whole market in which the new product is to be launched. A test area may include several cities and towns, or a particular region of a country or even a sample of consumers.
More than one test area can be selected if the firm wants to assess the effects on demand due to various alternative marketing mix.
Advertising or packaging can be done in various market areas. Then the demand for the product can be compared at different levels of price and advertising expenditure. In this way, consumer’s response to change in price or advertising can be judged.

35. Demerits of market test method
The test experiments are that they are very costly and much time consuming.
If in a test market prices are raised, consumer may switch to the competitor’s products.
It may be difficult to regain lost customers even if the price is reduced to the previous level. Moreover, it is often difficult to select an area, which accurately represents the potential market.

36. Time series analysis method
1)TREND:- Past data is used to predict the future sales of firm .
2)SEASONAL VARIATIONS:- It is taken into account the variations in demand during different seasons.
Eg:- The sale of cotton dresses increases in summer. The sale of Woolen clothes increases in winter.
3)CYCLICAL VARIATIONS:- This variations in demand due to the fluctuations in the business cycle – Boom, recession and depression.
4) RANDOM FLUCTUATIONS:- It may happen due to Natural calamities like flood, earthquake, etc. which cannot be predicted accurately.

38. Statistical demand analysis
If two variables are correlated in a definite manner, the behaviour of one of them can be predicted on the basis of the data about the other variable.
For example, in many developed countries sales of toothbrush clearly seem to be related with the size of population.
Thus if any two variables are correlated and if reliable data about one of them is available, the value of the other variable can be predicted with accuracy.
Demerit of this method is that it depends too much on the past events.

39. Importance of advertising
To producers and traders
Meeting competition- by creating brand loyalty
Steady demand e.g. hot and cold coffeee
Higher sales volume
Introduction of new products
Economies of scale
Goodwill
Employee morale- product is known to customers so task of salesmen becomes easy

40. To customers
Convenience
Education of consumers
Fair prices
Better quality
To society
Employment
Standard of living
Sustain the press
Stimulates research and development
Incentive to progress
Art and culture

41. Market segmentation Meaning Importance
Different bases of market segmentation with reference to consumer product and industrial product

42. Meaning of market segmentation
The concept of market segment is based on the fact that the market of commodity are not homogeneous but they are heterogeneous. Market represent a group of customer having common characteristics but two customers are never common in their nature, habits, hobbies, income and purchasing techniques.

43. According to Philip kotler,
“Market segmentation is sub-dividing a market into distinct and homogeneous subgroups of customers where any group can conceivably be selected as a target market to be met with distinct marketing mix.”
Dividing large market into small group
Each group should have common characteristic

44. Importance of market segmentation
Facilitates consumer-oriented marketing
Facilitates introduction of suitable marketing mix
Facilitates introduction of effective product strategy
Facilitates the selection of promising markets
Facilitates exploitation of better marketing opportunities
Facilitates selection of proper marketing programme

45. Facilitates effective advertising
Provides proper direction to marketing efforts
Provides special benefits to small firms
Facilitates optimum use of resources

46. Different bases of market segmentation of consumer product
Demographic
Geographic
Psychographic
Behavioral

47. Demographic segmentation
Age and life-cycle stage
Gender
Income
Generation
Social class

48. Geographic segmentation
Region
City
Rural and semi-urban areas

49. Psychographic segmentation
Lifestyle
Personality
Values

50. Behavioral segmentation
Occasions
Benefits
Usage rate
Loyalty status
Readiness stage
Attitude toward product

51. Different bases of market segmentation of industrial product
Demographic
Operating variables
Purchasing approaches
Situational factors
Personal characteristics

52. Demographic
Industry
Company size
Location

53. Operating variables Company Technology Product and brand use status
Customer capabilities

54. Purchasing approaches
Purchasing function organisation- highly centralised or decentralised purchasing organisation
Power structure- engineering dominated, financially dominated
Nature of existing relationship among buyers and sellers
General purchasing policies- leasing, service contract, system purchases, sealed bidding
Purchasing criteria- Quality, service, price

55. Situational factors
Urgency
Product application
Size of the order

56. Personal characeristics
Buyer-seller similarity
Attitude towards risk
Loyalty