Transcript Marketing Intro:kotler Ch:1(pps)

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 as”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 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
•
•
1.
2.
3.
4.
5.
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
There are at least two parties.
Each party has something that might be of value to
other party.
Each party is capable of communication and delivery.
Each party is free to accept or reject the offer.
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. Disney’s 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” Let’s 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 can’t 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.That’s 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 Apple’s 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 organization’s
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
•
•
1.
2.
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
Reactive Market orientation:You see the need and
you respond with a product
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 didn’t 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 firm’s 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 P’s 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 that’s taken must be
taken with all of them in view.
Satyarth Priyedarshi,DCM,MICA
Components of holistic
mktg:Internal Marketing
•
•
•
1.
2.
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
All marketing functions(sales force, advertising,customer
service,product managers, marketing research) must work
together and coordinate their effort with just customer in mind.
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:Shouldn’t 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 product’s 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 don’t 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.
Satyarth Priyedarshi,DCM,MICA