Marketing Management

Chapter 1

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What is Marketing?
Marketing is the delivery of customer
satisfaction at a profit.

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The Goal of Marketing is:
To attract new customer by promising
superior value, and to keep current
customers by delivering satisfaction.

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 What according to you is the best
product/ service that has been launched
in the market till date?

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 Marketing, more than any other business function,
deals with customers.
 Creating customer value and satisfaction are at the
very heart of modern marketing thinking and
practice.
 Some people believe that only large business
organizations operating in highly developed
economies use marketing, but sound marketing is
critical to the success of every organization – whether
large or small, for profit or non – profit, domestic or
global.

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Marketing Defined
 Many people think of marketing only as selling and advertising.
 Selling and advertising are only the tip of the marketing ice-berg.
 Marketing is one of three key core functions that are central to all
organizations.
 Marketers act as the customers’ voice within the firm and marketers
are responsible for many more decisions than just advertising or sales:
 Analyse industries to identify emerging trends.
 Determine which national and international markets to enter or
exit.
 Conduct research to understand consumer behavior.
 Design integrated marketing mixes – products, prices, channels of
distribution, and promotion programs.
Marketing is a social and managerial process by which individuals and
groups obtain what they need and want through creating and
exchanging products and value with others.

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The Marketing Process
 5 step model:
 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 relationship and create customer
delight
 Capture value from customers

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What is marketed?
 Gods and goods
 Services (service to goods mix)
 Events

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 Experiences
 Persons

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 Places
 Properties

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organizations

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information

 IDEAS: “In factory we make cosmetics

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To explain marketing definition, we
examine the following important terms :
 Needs, wants, and demands
 Products and services
 Value, satisfaction and quality
 Exchange, transactions, and relationships
 Markets

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Needs, Wants, and Demands
Needs:
 The most basic concept underlying marketing is that of human needs.
 Human needs are states of felt deprivation.
 Human have many complex needs:
 Physical needs for food, clothing, warmth, and safety
 Social needs or belonging and affection
 Individual needs for knowledge and self – expression
Wants:
 Want are the form taken by human needs as they are shaped by culture and
individual personality.
 People have almost unlimited wants but limited resources.
 They want to choose products that provide the most value and satisfaction for
their money.
Demands:
 When backed by buying power, wants become demands.
 Consumers view products as bundles of benefits and choose products that give
them the best bundle for their money.
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 Write 1 of each:

 Need
 Want
 Demand

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 Need of an american in terms of food
 Need of an mexican in terms of food
 Inidan

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Five types of needs
 Stated needs mobile
 Real needs communication
 Unstated needs latest technology and
apps
 Delight needs free talk time or
extended warranty
 Secret needs-?

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debate
 Does marketing create or satisfy a
need?

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exchange
 An exchange process is simply when
an individual or an organisation decides
to satisfy a need or want by offering
some money or goods or services in
exchange. It's that simple, and you
enter into exchange relationships all
the time. The exchange process
extends into relationship marketing

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Products and Services
Product:
 Anything that can be offered to a market to satisfy a
need or want.
 The concept of product is not limited to physical
objects – anything capable of satisfying a need can
be called a product.
Services:
 In addition to tangible goods, products also include
services, which are activities or benefits offered for
sale that are essentially intangible and do not result
in the ownership of anything.

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Product levels

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 I want protection from rain and cold
 Qualities of the product
 Expectations from the product
 Is it a fashion brand
 What more can be done?

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 i. Core Benefit or Product:
 This is the most fundamental level. This includes the
fundamental service or benefit that the customer is
really buying. For example, a hotel customer is
actually buying the concept of “rest and sleep”
 ii. Basic or Generic Product:
 The marketer at this level has to turn the core benefit
to a basic product. The basic product for hotel may
include bed, toilet, and towels.

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 iii. Expected Product:
 At this level, the marketer prepares an
expected product by incorporating a set
of attributes and conditions, which
buyers normally expect they purchase
this product. For instance, hotel
customers expect clean bed, fresh towel
and a degree of quietness.
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 iv. Augmented product:
 At this level, the marketer prepares an augmented
product that exceeds customer expectations. For
example, the hotel can include remote-control TV,
fresh, flower room service and prompt check-in and
checkout. Today’s competition essentially takes place
at the product-augmentation level. Product
augmentation leads the marketer to look at the user’s
total consumption system i.e. the way the user
performs the tasks of getting, using fixing and
disposing of the product.
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 Potential Product:
 This level takes into care of all the possible
augmentations and transformations the product
might undergo in the future. This level prompts the
companies to search for new ways to satisfy the
customers and distinguish their offer. Successful
companies add benefits to their offering that not only
satisfy customers, but also surprise and delight them.
Delighting is a matter of exceeding expectations

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activity
 Prepare the product levels for the
following:
 Pens laptops
 Bag packs MUSIC SYSYTEMS
 Insurance Restaurants
 Amusement park fast food chain
 Travelling bags washing machines
 Make up kit air conditioners
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 Car
 Air travel
 Bicycles
 Credit card
 Starbucks
 Coca cola
 Zara
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 Values, Satisfaction, and Quality
Values:
 Customer value is the difference between the values the customer gains from
owning and using a product and the costs of obtaining the products.
 Customers often do not judge product value and costs accurately or objectively.
They act on perceived value.
Satisfaction = point of differntiation
 Customer satisfaction depends on a product’s perceived performance in
delivering value relative to a buyer’s expectation.
 If the product’s performance falls short of the customer’s expectations, the
buyer is dissatisfied.
Quality:
 Customer satisfaction is closely linked to quality.
 Quality has a direct impact on product performance.
 Quality can be defined as “freedom from defects”.
 TQM programs designed to constantly improve the quality of products, services,
and marketing processes.

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 Quality of product Value of product relative to
price - a function of quality and price
 Time issues, such as product availability,
availability of sales assistance, time waiting at
checkout, and delivery time
 Atmosphere of store, such as cleanliness,
organization, and enjoyable shopping
environment
 Service personnel issues, such as politeness,
attentiveness, and helpfulness
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POP & POD
 example looks at a possible way that a chain of fast food outlets could
challenge the market leader (in this case let’s assume that the market
leader is McDonald’s). The center circle in the diagram below highlights
the points-of-parity that the rival chain wants to duplicate (which
includes a similar menu choice, similar in-store dining facilities, and
pricing around the same level).

 However, the rival firm chain still needs to give consumers a reason to
switch, so they have identified two points-of-difference to highlight as
part of their overall positioning (which are built around high-quality
ingredients and having more flexibility in the menu for the individual).
The overall combination of POP and POD creates their overall
positioning.

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POP & POD of
 Airlines: Indigo & GoAir
 Sim cards: Jio v/s Uninor
 Fast food: McD v/s KFC
 Dominos v/s Pizzahut
 Ola v/s Uber
 Make my trip v/s Yatra
 Food panda v/s swiggy
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 Two wheelers
 Four wheelers
 Taj v/s Marriott
 Baskin robbin v/s gelato
 Red label v/s waghbhakri
 Tissot v/s Rado/tag huer

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Key markets

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Global markets
 Similar demand
 Government regulations
 Economic differences
 Co-ordination and integration in multiple
markets
 Integration through price, brand name ,
packaging, same advertising message
 Coordination thru: pricing, sales campaign,
promotion etc.
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 Exchange, Transactions,
and Relationships
Exchange :
 The act of obtaining a desired object from someone
by offering something in return
Transaction :
 A trade between two parties that involves at least
two things of value, agreed – upon conditions a time
of agreement, and a place of agreement.
Relationship marketing :
 The process of creating, maintaining, and enhancing
strong, value – laden relationships with customers
and other stakeholders

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Marketing Myopia
 The term 'marketing myopia' was first expressed
in a famous article of the same name written by
Theodore Levitt for the Harvard Business Review in
1960. In 'Marketing Myopia,' Levitt argued that many
companies incorrectly take a shortsighted approach
to marketing, viewing it as merely a tool for selling
products. Instead, he argued that companies should
look at marketing from the consumer's point of view.

 What business are we in?

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 MARKETING MANAGEMENT
PHILOSOPHIES/orientation

 The role that marketing plays within a company

 Product concept

 Selling concept

 Marketing concept

 Societal marketing concepts

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Production Concept
The philosophy that consumers will
favour products that are available and
highly affordable and that management
should therefore focus on improving
production and distribution efficiency.
China(haier)
To expand the market

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Product Concept
The philosophy that consumers will
favour products that offer the most
quality, performance, and innovative
features.

Apple

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Selling Concept
The idea that consumers will not buy
enough of the organization’s products
unless the organization undertakes a
large – scale selling and promotion
effort.

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Marketing Concept
The marketing management philosophy
that holds that achieving organizational
goals depends on determining the
needs and wants of target markets and
delivering the desired satisfactions more
effectively and efficiently than
competitors do.

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Societal Marketing Concept
The idea that the organization should
determine the needs, wants, and
interests of target markets and deliver
the desired satisfactions more
effectively and efficiently than
competitors in a way that maintains or
improves the consumer’s and society’s
well – being.

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Three Considerations Underlying The Societal
Marketing

Society
(Human welfare)

Societal
marketing
concept

Consumers Company
(Want satisfaction) (Profits)

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 (1) The body shop: The Body Shop is a well known cosmetic brand which has followed
societal marketing concept rigorously. The company uses only plant based materials for its
products. It is against animal testing, defends human rights, supports community trade,
and works for overall protection of the planet. They have set up their own charity
foundation to help the cause.

 (2) Companies with emphasis on recycled products, green and organic products that
reduces/eliminates the damage to environment also fall under the societal marketing
strategy.

 (3) Food companies providing healthy, nutritional and natural products are also examples of
societal marketing strategy.

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Holistic marketing concept
 Marketing right and wrong
 It is based on the development , design
and implementation of marketing
programs, processes and activities that
recognizes their breadth and
interdependencies

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 Relationship marketing(dairymilk)
 Catering to individual customers

 Integrated marketing

 Internal marketing

 Performance marketing

----financial accountability
---- social responsibility marketing
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Sales V\ s marketing

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MARKETING MYOPIA
 The term 'marketing myopia' was first
expressed in a famous article of the same
name written by Theodore Levitt for the
Harvard Business Review in 1960. In
'Marketing Myopia,' Levitt argued that many
companies incorrectly take a short sighted
approach to marketing, viewing it as merely a
tool for selling products. Instead, he argued
that companies should look at marketing from
the consumer's point of view.
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 Green marketing is the marketing
of products that are presumed to be
environmentally preferable to others.
Thus green marketing incorporates a
broad range of activities, including
product modification, changes to the
production process, sustainable
packaging, as well as modifying
advertising.
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 Mcd
 KFC
 Idea cellular
 Tata group
 Digital tickets

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