Download What is Marketing…??

What is Marketing…??
Selling?
Advertising?
Promotions?
Making products available in stores?
Maintaining inventories?
All of the above, plus much more!
1
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
2
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.
3
Simple Marketing System
Communication
Industr y
(a collection
of sellers)
Goods/services
Money
Information
Market
(a collection
of Buyers)
4
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 P’s –

product

price

place

promotion
5
What Is Marketing?
Simple definition:
Marketing is the management process
responsible for identifying, anticipating, and
satisfying customer requirements profitably.”
(CIM,2001)
Goals:
4. Attract new customers by promising superior
value.
5. Keep and grow current customers by delivering
satisfaction.
Marketing Defined
• Marketing is the activity, set of
instructions, and processes for creating,
communicating, delivering, and
exchanging offerings that have value for
customers, clients, partners, and society
at large.
OLD view of
marketing:
NEW view of
marketing:
Making a sale
—“telling and
selling”
Satisfying
customer needs
Why is Marketing
Important?
Shifting Business Paradigms
Buyers’ markets
Sellers’ markets
The 4 Ps & 4Cs
Marketing
Mix
Convenience
Place
Product
Customer
Solution
Price
Promotion
Customer
Cost
Communication
9
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
10
Scope – What do we market










Goods
Services
Events
Experiences
Personalities
Place
Organizations
Properties
Information
Ideas and concepts
11
Core Concepts of
Marketing
Based on :
 Needs, Wants, Desires / demand

Products, Utility, Value & Satisfaction

Exchange, Transactions & Relationships

Markets, Marketing & Marketers.
12
Core Concepts of Marketing
Needs, wants
demands
Markets
Products
Marketing &
Marketers
Utility, Value &
Satisfaction
Xchange, Transaction
Relationships
13
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
14
Needs, Wants, and Demands
Need: State of felt deprivation including physical,
social, and individual needs.
• Physical needs: Food, clothing, shelter, safety
• Social needs: Belonging, affection
• Individual needs: Learning, knowledge, self-
expression
Want: Form that a human need takes, as
shaped by culture and individual
personality.
• Wants + Buying Power = Demand
In order to understand Marketing let us begin
with the Marketing Triangle
Customers
Company
Competition
16
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
17
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
18
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
19
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
20
Customer looks for Value
Value
= Benefit / Cost
Benefit
= Functional Benefit + Emotional
Benefit
Cost
= Monetary Cost + Time Cost +
Energy Cost + Psychic Cost
21
Analysis Of Competition
Who are your competitors?
What are their strengths and weaknesses?
What have been their strategies?
How are they likely to respond to your
Marketing plan?
22
The Marketing Process
A simple model of the marketing process:
• Understand the marketplace and customer
needs and wants.
• Design a customer-driven marketing
strategy.
• Construct an integrated marketing
program that delivers superior value.
• Build profitable relationships and create
customer delight.
• Capture value from customers to create
profits and customer quality.
Marketing Management
Marketing managers must consider the following, to
ensure a successful marketing strategy:
2. What customers will we serve?
— What is our target market?
3. How can we best serve these
customers?
— What is our value proposition?
Choosing a Value
Proposition
The set of benefits or values a company
promises to deliver to consumers to satisfy
their needs.
• Value propositions dictate how firms will
differentiate and position their brands in
the marketplace.
The Marketing Concept
The marketing concept:
• A marketing management philosophy that
holds that achieving organizational goals
depends on knowing the needs and wants
of target markets and delivering the
desired satisfaction better than
competitors.
Customer Perceived Value
Customer perceived value:
“Customer’s evaluation of the difference
between all of the benefits and all of the
costs of a marketing offer relative to
those of competing offers.” (Armstrong
& Kotler)
 Perceptions may be subjective
 Consumers often do not objectively
judge values and costs.
Customer value = perceived benefits – perceived
sacrifice.
The Marketing Mix
The set of controllable, tactical marketing tools that
the firm blends to produce the response it wants in
the target market.
• Product: Variety, features, brand name, quality,
design, packaging, and services.
• Price: List price, discounts, allowances, payment
period, and credit terms.
• Place: Distribution channels, coverage, logistics,
locations, transportation, assortments, and
inventory.
• Promotion: Advertising, sales promotion, public
relations, and personal selling.
Customer-Driven Marketing Strategy
Requires careful customer analysis.
To be successful, firms must engage in:
• Market segmentation
• Market targeting
• Differentiation
• Positioning
Market Segmentation and Targeting
Segmentation:
• The process of dividing a market into
distinct groups of buyers with different
needs, characteristics, or behavior who
might require separate products of
marketing programs.
Targeting:
• Involves evaluating each market segment’s
attractiveness and selecting one or more
segments to enter.
Differentiation and Positioning
Differentiation:
• Creating superior customer value by
actually differentiating the market offering.
Positioning:
• Arranging for a product to occupy a clear,
distinctive, and desirable place relative to
competing products in the minds of target
consumers.
Market Segmentation
Key segmenting variables:
• Geographic
• Demographic
• Psychographic
• Behavioral
Different segments desire different benefits from
products.
Best to use multivariable segmentation bases in
order to identify smaller, better-defined target
groups.
Market Segmentation
Why Segment?:
• Meet consumer needs more precisely
• Increase profits
• Segment leadership
• Retain customers
• Focus marketing
communications
Evaluating Market Segments
Segment size and growth:
• Analyze current segment sales, growth rates,
and expected profitability.
Segment structural attractiveness:
• Consider competition, existence of substitute
products, and the power of buyers and
suppliers.
Company objectives and resources:
• Examine company skills and resources needed
to succeed in that segment.
• Offer superior value and gain advantages over
competitors.
Market Targeting
Market targeting involves:
• Evaluating marketing segments.
Segment size, segment structural attractiveness,
and company objectives
and resources are considered.
• Selecting target market segments.
Alternatives range from undifferentiated
marketing to micromarketing.
• Being socially responsible.
Differentiation and
Positioning
A product’s position is:
• The way the product is defined by
consumers on important attributes—the
place the product occupies in consumers’
minds relative to competing products.
• Perceptual positioning maps can help
define a brand’s position relative to
competitors.
Differentiation and
Positioning
Identifying possible value differences and
competitive advantages:
• Key to winning target customers is to
understand their needs better than
competitors do and to deliver more value.
Competitive advantage:
• Extent to which a company can position
itself as providing superior value.
Achieved via differentiation.
Strategic Marketing
Strategic marketing management is concerned with
how we will create value for the customer
Asks two main questions
 What is the organization’s 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
38
Strategic Planning
Strategic Planning is the managerial process of
creating and maintaining a fit between the
organization’s objectives and resources and the
evolving market opportunities.

Also called Strategic Management Process

All organizations have this

Can be Formal or Informal
39
The Strategic-Planning, Implementation,
and Control Process
40
Business Strategic-Planning
Process
External environment
(Opportunity &
Threat analysis)
Goal Formulation
Business Mission
Internal Environment
(Strength/ Weakness analysis)
41
Strategy Formulation
Environmental Analysis
Internal Analysis
Competitor
Customer
Supplier
Regulatory
Social/ Political
Technology Know-How
Manufacturing Know-How
Marketing Know-How
Distribution Know-How
Logistics
Opportunities & Threats
Identify opportunity
Strength & Weaknesses
Identity Core Competencies
Fit internal Competencies with external opportunities
Firm Strategies
42
The Marketing Plan
A written document that acts as a guidebook of
marketing activities for the marketing manager
43
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
44
The Marketing Process
Business
Mission
Stateme
nt
Objectiv
es
Situation
or SWOT
Analysis
Marketing Strategy
Target Market
Strategy
Marketing Mix
Product
Place/Distribution
Promotion
Price
Implementation
Evaluation,
Control
45
Why a product like radio
declined and now once again
emerging as an entertainment
medium ?
46
What Were the Drivers of This Change ?
Technology ?
Government policy ?
Other media substitutes ?
47
Why Market Leaders
Suffered ?

HMT vs. Titan

HLL vs. Nirma

Bajaj vs. Honda

Dot.com boom, then bust and now resurgence

Market leadership today cannot be taken for
granted.New and more efficient companies are able
to upstage leaders in a much shorter period.
48
Factors
Influencing
Company’s
Marketing
Strategy
49
External Marketing Environment
External Environment
is not controllable
Social
Change
Ever-Changing
Marketplace
Demographics
Product
Distribution
Promotion
Price
Economic
Conditions
Physical / Natural
Competition
Target Market
Political &
Legal Factors
Environmental
Scanning
Technology
50
The macro-environment
is the assessment of the external forces that act upon the
firm and its customers, that create threats & opportunities
51
Product is . . . . .
Anything that is offered to the market for
attention, acquisition, use or consumption that
satisfies a want or a need
52
Types of Products
PRODUCTS
Consumer
Products
Services
Industrial
Products
53
Product Items, Lines, and Mixes
Product Item
A specific version of a product
that can be designated as a
distinct offering among an
organization’s products.
Product Line
A group of closely-related
product items.
Product Mix
All products that an
organization sells.
54
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
55
Depth of the product lines
Gillette’s Product Lines & Mix
Width of the product mix
Blades and
razors
Toiletries
Fusion – 5 blade
Mach 3 Turbo
Mach 3
Sensor
Trac II
Atra
Swivel
Double-Edge
Lady Gillette
Super Speed
Twin Injector
Techmatic
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
56
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
57
Some Industries - Service
Sector
Banking, stock broking
Health care
Lodging
Education
Restaurants, bars,
catering
Wholesaling and retailing
Insurance
Repair and maintenance
Professional (e.g., law,
architecture, consulting)
News and entertainment
Transportation (freight and
passenger)
Laundries, dry-cleaning
58
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
59
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
60
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 firm’s operations that have the potential to affect
the relationship with customers.
61
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
62
The Give and Get of Marketing
63
Great Words on Marketing
•
“The purpose of a company is ‘to create a customer…The only
profit center is the customer.’”
•
“A business has two—and only two—basic 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.”
64
Drivers of Customer Satisfaction
Many aspects of the firm’s 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
65
Marketers and Markets
Marketers are focused on stimulating
exchanges with customers who make
up markets – B2C or B2B.
The market is comprised 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
66
Stages of Customer Interaction
67
What Changed in Marketing…
New Economy
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
• 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
68
Are Banks truly
marketing-savvy and
customer - centric?
69
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.
70
Myth 2 – Better technology (read CRM) leads to
better customer service.
Mythbuster – Technology
alone does not deliver,
helps people do.
71
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…
72
Myth 4 – The only way to get a customer is
from
competition.
Mythbuster – Customers
are not only present
where competition is.
73
Myth 5 – Just advertise and - You will sell.
Mythbuster – Advertising will only sell,
Not retain customers.
74
Myth 6 – No difference between marketing &
selling
Mythbuster – “Selling focuses on the needs of the
seller; marketing on the needs of the buyer.
75
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!!
76
So what will the differentiators be :
• Technology ?
• Brand ?
77
The real differentiator of
customer – centricity in a
commoditised world of
financial products -
Customer Service !
78