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MARKETING MANAGEMENT
Prof N B Kanagal
Principles of Marketing
Introduction
What is the Marketing Concept
Marketing Concept is about satisfying consumer needs and wants simultaneously
Meeting organizational objectives
There are five types of needs:
stated needs:
unstated needs:
real needs :
secret needs:
delight needs:
the customer wants an inexpensive car
customer expects good service from a dealer
customer wants a low operating cost car, not just a low price
customer wants to be known as a savvy consumer
customer wants a navigation system to be installed
Marketing Concept is about customer satisfaction
Customer Satisfaction
Hyundai Launches ‘Hyundai Sonata’
In the untapped Rs.10-20 lakh
Segment - acquisition
Customer Acquisition
Volvo, Sweden has been very successful in
Customer retention, with a repeat purchase
Rate of up to 80% over last 40 years.
Customer Retention
Good customer satisfaction is obtained by focusing on both the customer
acquisition and customer retention processes.
Marketing Concept is about customer satisfaction
Customer is also satisfied when they obtain the following
a.
VALUE
b.
SERVICE
c.
QUALITY – Performance, Conformance
d.
CHOICE
Marketing concept is that of exchanges.
A transaction is a measured exchange.
Contract formalizes a transaction either for the present or for future and
Legalizes it if necessary and also provides a recourse in case of a market failure
There are five conditions of exchange
1.
2.
3.
4.
5.
There are at least two parties
Each party has something that might be of value to the other party
Each party is capable of communication and delivery
Each party is free to accept or reject the exchange offer
Each party believes it is appropriate or desirable to deal with other party
Marketing Management is Demand Management.
Demand represents:
-
desire and willingness to buy
-
ability to buy
Marketing Management is Demand Management. Eight demand
States are possible

Negative demand – ex-convicts and alcoholics in factories for employment

No Demand – Indian College students in semi-urban areas have no demand for
foreign language courses

Latent Demand – Strong latent demand for harmless cigarettes or fuel efficient cars

Declining Demand – for Yamaha in Pianos in 1980s

Irregular Demand - Metro rail demand through the day, seasonality

Full Demand – Organizations sell to maximum capacity

Overfull Demand – Waiting list on Honda Scooters at the dealership

Unwholesome Demand – Hard Drugs
Marketing Concept has evolved over six stages
-Production concept: It holds that consumers will prefer products that
are widely available and inexpensive
-product concept: Consumers will favor those products that offer the most
quality, performance or innovating features
-selling concept: Consumers do not buy enough, so firms must put in extra
efforts to sell products.
-marketing concept: sense the market and respond with offerings – consists of
both reactive and proactive market orientation
-holistic marketing concept:
Includes dimensions of internal marketing,
development of integrated marketing programs that
cover the 4Ps, relationship marketing that covers
customers, channel and partners and socially
responsible marketing that covers ethics,
environment, legal and community issues.
AMA 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 stakeholders.
Kotler definition :
 Human activity directed at satisfying needs and
wants through exchange processes
Marketing people are in involved in marketing ten types of entities










Goods
Services
Experiences
Events
Persons
Places
Properties
Organizations
Information
Ideas
Important Schools of Thought in Mktg
- Functional School
- Managerial School
- Buyer Behavior School
- Organizational dynamics school
Functional School:
Marketing is organized along functions – product
management, sales, advertising, market research
Managerial School:
The marketing that is taught comprising of PLC,
marketing mix, market segmentation and positioning.
Pioneered by Joel Dean, John Howard, Neil Borden
William Lazer, Theodore Levitt, Philip Kotler
Buyer Behavioral School: Unwise to target an “Eonomic Man”. Consumer
behavior study will lend more depth. Pioneers include
Ernest Dichter, John Howard, George Katona,
James Engel
Organizational Dynamics School: Interorganizational behavior is the key focal
point for understanding marketing process.
Trends in Marketing
1.
Mass customization: This addresses heterogeneity in markets.
e.g. Jenson and Nicholson in paints
Mercedes Benz – choice of design of cars at factory
on order using flexible manufacturing, JIT production
JIT distribution, computer information systems
2.
Provision of supervalue / ecstasy
Airline frequent flyers tied to hotel rentals/ auto rentals
3.
Wants become needs
Today’s power steering option- want is tomorrow’s need
4.
Increasing Brand Proliferation – concept of power brands
5.
Trend towards relationship marketing. CRM. Customer building takes
precedence over classical marketing
6.
Rise of Competition e.g. HLL Pepsodent-Colgate; Computer Industry Rivalry
7.
The importance of branding and other intangible assets such as corporate
reputation, intellectual capital.
8.
Requirement of both reactive and proactive market response mechanisms.
9.
Firms should make deliberate attempts to step out of short termism and
look at long term
10. Societal Marketing more widely practiced.
11. How to convert niche products to larger markets e.g. mobile phones,
home computers etc.
12. Globalization
CUSTOMER VALUE
CUSTOMER DELIVERED
VALUE
Total Customer Value
Product Value
Services Value
|
Personnel Value
|
Image Value
Total Customer Cost
Monetary Cost
Time Cost
|
Energy Cost
|
Psychic Cost
Determinants of Customer Delivered Value