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Satyarth Priyedarshi,DCM,MICA Understanding Marketing Management Extracts from chapter 1 of Marketing Management by Philip Kotler, 12e
Satyarth Priyedarshi,DCM,MICA What is Marketing Marketing deals with identifying and meeting human and social needs. American Marketing Association Defines it asMarketing 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 benefits an organization and its stakeholders. 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.
Satyarth Priyedarshi,DCM,MICA Social definition of marketing Marketing is a social process by which individuals and groups attain what they need and want through creating, offering and freely exchanging products and services of value. Marketing is not just selling products or advertising them!!! Leading management guru Peter Drucker says:There will always be the need for some selling.But the aim of marketing is to make selling superfluos.The aim of marketing is to understand the customer so well that the products or service fits him and sells itself.Ideally marketing should result in a customer who is ready to buy.All that should be needed then is to make the product or service available.
Satyarth Priyedarshi,DCM,MICA Exchange and Transaction Exchange is a core concept of marketing,is the process of obtaining a desired product from some one by offering something in return. For exchange potential to exist five conditions must exist 1.There are at least two parties. 2.Each party has something that might be of value to other party. 3.Each party is capable of communication and delivery. 4.Each party is free to accept or reject the offer. 5.Each party thinks its appropriate or desirable to deal with the other party.
Satyarth Priyedarshi,DCM,MICA Exchange and transaction II Transaction is a trade of values between two or more parties. Its not necessary that money be involved.It can be a barter too. It involves, two things of value,agreed upon conditions,a time of agreement and a place of agreement, and a legal system supporting the agreement. Transaction is different from transfer.In transfer one person gives goods to other but doesnot receive anything tangible(that can be touched) in return.
Satyarth Priyedarshi,DCM,MICA Things that are marketed Goods Services: U.S. economy has 30:70 ratio between goods and services. Events Experiences:eg. Disneys magic kingdom Person: eg: film stars.Managemet guru tom peters says that every person should become a BRAND Places: eg:tourism Properties: Organizations:eg: Philips Lets make things Better Information:Eg: encyclopedias, researches Ideas: Charles revson of revlon says:In factories we make cosmetics,in stores we sell hope.
Satyarth Priyedarshi,DCM,MICA Who Markets A Marketer is someone who seeks response(attention, a purchase vote etc.) from other party called the prospect.The fine point is that both the parties are trying to sell something to other and both are marketers.
Satyarth Priyedarshi,DCM,MICA Types of Demand Negative demand: Consumer dislikes the product and is willing to pay a price to avoid it.Eg: Birth control products like Nasbandi for which govt. pays money to the person. Non existent demand: consumers are unaware or uninterested in the product Latent Demand: Consumers may share a strong need that cannot be satisfied by an existing product.Eg: harmless cigarettes Declining demand: consumers begin to buy the product less frequently or not at all Irregular demand: Consumer purchases vary on seasonal, monthly, weekly daily or even hourly basis.eg: resorts, woolen clothing,Anti prickly heat powder. Full demand: Consumers are adequately buying all products put in to the market place Overfull demand:More consumers would like to buy the product than can be satisfied Unwholesome demand: Consumers may be attracted to products that have undesirable social consequences.Eg: prostitution
Satyarth Priyedarshi,DCM,MICA Markets Traditionally market was a physical place where buyers and sellers gathered to buy and sell goods. Economista describe markets as a collection of buyers and sellers who transact over a particular product or product class Marketers use the term as a synonym for various groupings of customers.
Satyarth Priyedarshi,DCM,MICA Types of Customer Markets Consumer markets: Companies selling mass consumer goods and services.Companies spend a great amount of time and money to build superior brand image. Business Markets: Companies selling business goods and services.Business buyers buy goods in order to make or resell the product to others for a profit.Business marketers must therefore show that how is the product going to help them achieve higher revenuses at lower cost. Global Markets:Markets across political boundaries. Marketers must decide which countries to target,how to adapt their products and communications and how to price them…etc. Nonprofit and Governmental Markets:Companies selling products to non profit organizations like churches, Universities,or governmental agencies etc.
Satyarth Priyedarshi,DCM,MICA Market place,Market Space and MetaMarkets Market place is a physical place…like when you shop in the store Market space is digital…when you shop on internet Mohan Swahney has proposed the concept of Metamarkets.These are a cluster of complementary products or services that are closely related in the minds of consumers but are spread across a diverse set of industries.Example:automobile Metamarket consists of automobile manufacturers,new and used car dealers,Financing companies,Insurance companies,Mechanics,Spareparts dealers,Service shops,auto magazines,classifieds,Auto sites on internet etc.
Satyarth Priyedarshi,DCM,MICA Elements of change in Markets Changing technology:Your laptop has killed a desktop Globalization:Is the laptop indian?? Deregulation:Many laws that restricted companies are no more. Privatization:new sectors in private hands.Visited any reliance petrol pump recently? Customer Empowerment:New laws protect you. Customization:Interesting concept.Each customer should be able to get the exact product he or she wants.Started with Dell making comuters that people wanted and not what it had to sell.Sad I cant have 80 gb on this laptop. Heightened Competition Industry Convergence:Are cosmetics in cosmetics industry or chemical industries.The boundaries are blurring. Retail Tranformation Disintermediation:Just a fancy word for brickless online companies..and welcome to the world of management jargon.The brick and(also changed to) click companies are said to be engaged in Reintermediation.
Satyarth Priyedarshi,DCM,MICA Company Orientation Towards Marketplace:Production concept The Production Concept:View that the customers will prefer products that are widely available and inexpensive.So how many of you changed to classic as benson and hedges was not available?? People try to achieve high production efficiency low costs and mass distribution.Thats why all the components in your comuter are chinese.This usually happens in developing countries as labor is cheaper so product price is low.
Satyarth Priyedarshi,DCM,MICA Company Orientation Towards Marketplace:The Product concept View that Consumers will favor those products that offer the most quality. So managers here try to improve and keep on improving the product quality by research and development. Fine Point: A new improved product will not necessarily be succesful unless the product is priced, distributed, Advertised or Sold properly.Had it been not so All of us would have been working on Apples Mac and not Windows.
Satyarth Priyedarshi,DCM,MICA Company Orientation Towards Marketplace:The Selling concept The view that consumers and businesses, if left alone will not buy enough of the organizations products.The organization must therefore take an aggressive selling and promotion effort.In other words they are making what they make rather than what market wants. Fine Point:the selling concept is majorly used with products that we actually do not need or when firm is on over capacity(its producing more and selling less).How many people think that they actually Need Coke or pepsi??Will you really go out and buy Insurance ??
Satyarth Priyedarshi,DCM,MICA Company Orientation Towards Marketplace:Marketing Concept View that instead of make-and-Sell, Companies should Sense-and-Respond.So the job is not to find the right customers for your products but the right product for your customers. MORE JARGON 1.Reactive Market orientation:You see the need and you respond with a product 2.Proactive Market orientation:You see a future need and you respond with a product.So by the time the need arrives in the market your product is there.Better still make a product that people didnt know that they wanted or was possible.Example: 30 years ago who would have said that they needed a computer until it hit the markets?
Satyarth Priyedarshi,DCM,MICA Holistic Marketing(actually just useless jargon) View that everything matters and there fore there is a need to integrate relationship marketing(more jargon and you will be swamped),Integrated marketing,Internal marketing(wheeew!!), and Social responsibility marketing(I HATE KOTLER)
Satyarth Priyedarshi,DCM,MICA Components of holistic mktg:relationship marketing Tries to making enduring relationships with all the people and organizations which can directly or indirectly affect the firms marketing activities. Relationship marketing has the aim of building mutually satisfying(what was that?) long term relationships with key parties-Customers, suppliers,Distributors, and other marketing partners-in order to retain their businesses.(actually involves throwing lots of parties,sending computer printed greeting cards, and sales people calling you needlessly) The aim is to build a unique organizational asset known as a Marketing Network.Needless to say whoever has the strongest marketing network wins the race.
Satyarth Priyedarshi,DCM,MICA Components of holistic mktg:Integrated Marketing Simple that the four Ps namely Price Place(of selling), Product(quality and features) and Promotion(you know it as advertising) must work in harmony to bring out results.All these must be integrated and any decision thats taken must be taken with all of them in view.
Satyarth Priyedarshi,DCM,MICA Components of holistic mktg:Internal Marketing Every one in the company must embrace(dirty minds) appropriate marketing principles. In other words the marketing principle mustnot only remain with the people who work on the boundaries of organization(like sales force) but also who are in seemingly remote areas(like research, product managers etc.) IT happens on two levels 1.All marketing functions(sales force, advertising,customer service,product managers, marketing research) must work together and coordinate their effort with just customer in mind. 2.All the departments must coordinate their efforts with just customer in mind(Yeah I too am thinking why to call it internal Marketing…)
Satyarth Priyedarshi,DCM,MICA Components of holistic mktg:Social Responsibility mktg. Understanding broader concerns and the ethical, environmental, legal, and social context of marketing activities and programs. In other words if you dump two tonnes of Toxic waste in yamuna but go on to plant a 1000 trees and open up an orphanage no one will kick your ass.Film stars do it all the times…like vivek oberoi at Tsunami relief.So the news paper wallahs donot harass them
Satyarth Priyedarshi,DCM,MICA Core Marketing Concepts:Needs wants and demands Need:Basic human requirement…like sex Want:basic human requirement directed to specific objects that might satisfy that need…like sex with aishwarya rai.. Demand:basic human requirement directed to specific objects with ability to pay.like you want to have sex with aishwarya rai and have 30 lacs to pay her too.
Satyarth Priyedarshi,DCM,MICA Core Marketing Concepts:Types of needs Stated Needs:like a person wants wife Real needs:He actually wants sex Unstated needs:If the wife is there definitely she will cook and wash too. Delight needs:It would be nice if she has a rich father and brings in a dowry of 5 cr rupees Secret Needs:Shouldnt mind if you go around with the secretary
Satyarth Priyedarshi,DCM,MICA Core con:Target Markets,Positioning,Segmentation Market segments are a group of customers with similar attributes.Eg.girls in MICA, or Girls in BRM,Girls in RCM,Or Girls from Delhi(demographic segment),Or girls who are open minded(Psychographic segment) Out of all the segments the segments which interest a marketer is the Target Market.So if you are interested in girls og BRM…they are the target Market. For each target market the firm offers a market offering.The offering is then positioned in the mind of target market as delivering some central benefits.So do you offer youself as the cute next door boy with starry eyes,or the Macho protector is your positioning. Essentially the product is the same(that is a boy).
Satyarth Priyedarshi,DCM,MICA Core Marketing Con:Offering and Brands The intangible value proposition is made physical by an offering,which can be a combination of products, services, Information, and experiences.So if you are handed a coke in an unmarked glass its still carbonated sweetend water Brand is an offering from a known source.So as soon as you know that the soft drink has been made by coca cola…its no longer sweetened carbonated water(product name on the bottle) but it becomes a coke…..voila.
Satyarth Priyedarshi,DCM,MICA Core Marketing Concepts:Value and Satisfaction The offering will be successful if it delivers value and satisfaction to the Target buyer(mind it..the target buyer and not just buyer) Value reflects the percieved tangible and intangible benefits and costs to the customers.So your degree from MICA has value as long as its giving you a job and/or heightened sense of pride(intangible).In other words customer always does a mental maths against cost/benefit for a product.So you will buy the coke from chhotas at 8 rs but not for 300 rupees.Because then the benefits(not real but percieved..its in your mind) are less than the Price you are paying for the goods. Value increases with quality and service…but decreases with price. Satisfaction on other hand rises from a persons comparative judgements resulting from a products percieved(again..) in relation to his or her expectations.So you might be satisfied with a flat coke at chhotas but not a flat coke at Mcdonalds
Satyarth Priyedarshi,DCM,MICA Core Marketing Concepts:Marketing Channels Communication channels: all the ad mediums Distribution channels: the retailers, hawkers,Wholesellers and whosoever helps the physical product reach to you. Service channels: Whosoever facilitates the transactions.
Satyarth Priyedarshi,DCM,MICA Core Marketing Concepts:Supply Chain The whole route a physical product takes from raw material to finished product in your hands constitutes the supply chain. Fine point:it is now obsolete and companies are paying more attention to value chain…that is when and what value is added on a product until it reaches you.
Satyarth Priyedarshi,DCM,MICA Core Marketing Concepts:Competition All the potential and actual rival offerings and substitutes that a buyer might consider. This is the crux actually because at a point coke is competing not just with Pepsi..but also bisleri…as all cater to the core benefit(removing thirst).The ceo of Pepsi(I dont remember his name) said we are competing not for market share but the share of stomach.
Satyarth Priyedarshi,DCM,MICA Marketing Management Tasks Developing marketing strategies and plans Capturing marketing insights Connecting with customers Building strong brands Shaping the marketing offerings Delivering Value Communicating Value Creating Long Term Growth
Satyarth Priyedarshi,DCM,MICA THANX I took the liberty of picking up examples.Sometimes I have put in some more than given in this chapter.I strongly suggest to go through the diagrams given in the chapter. Hope you like it……Do mail me your Abuses..But it has taken me more than 2.5 hours.The chapter was exceptionally long and it was fun.