Marketing Management

Session ­ 1

Prof. Arbuda Sharma

Marketing
• Good marketing is no accident, but is a result of
careful planning and execution
• Its importance lies in its ability as to how carefully
it is planed and how well it is executed
• If there is no sufficient demand for products and
services, then the marketing ability will really not
matter
• This marketing ability, involves financial aspect,
the operations, accounting and other business
functions that account for success and have to be
evolved over a period of time, as change is
inevitable, and to change with change will make the
distinction
• Marketing being tricky, has made the market
leaders like Microsoft, Wal-Mart, and Nike too,
to rethink and innovate their business models
• Jack Welch, GE’s former CEO, repeatedly warne
dhis company ‘change or die’
• BUT, for the necessary change to be made, the
marketing managers have to very carefully
monitor to empower customers and plan the
major decisions about the product (features
and design), the price to be offered, the place
where the products will be sold, and how much
to be spent on advertising/sales
 The scope…….
• Here we need to understand, what marketing
is….
• How it functions….
• What is marketed……
• And who does the marketing…..
 Definitions….
The Chartered Institute of Marketing defines
marketing as….
Marketing is the management process that identifies,
anticipates and satisfies customer requirements
profitably’
‘The right product, in the right place, at the right
time, and at the right price’
• The AMA 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 relationship in ways that
benefit the organisation and its stakeholders’
To cope with exchange processes work and skill is
a must. So,
• We also see ‘marketing management as the art
and science of choosing target markets and
getting keeping and growing customers,
through creating delivering and communicating
superior customer value’
• Therefore, marketing deals with identifying and
meeting human and social needs
• Or ‘meeting needs profitably’
• For Example Ebay..created an online auction
house and IKEA created knock down furniture…
they both created and turned a social and
private need into a profitable business
opportunity
• Marketing has also been described as the art of
selling products, it will be a surprise to know
that it is not so.. Peter Drucker puts it this
way…
• There will always be the need for some selling but
the aim of marketing is to make selling
superfluous, it is to know and understand the
customer so well that the product or the service
fits him and sells itself. Ideally marketing should
result in a customer who is ready to buy, and all
that should be needed then is then to make the
product or service available
for example Sony’s play station,
Gillette’s Mach 3 razor
Toyota’s Lexus automobile and
Indigenously designed Tata Indica (where the company
communicated value proposition for the product with tagline ‘more
care per car’ and subsequently expanded its product range with
extensive market research)
• Exchange and transactions
• Exchange…is the core concept of marketing, a
value creating process
• The process where a desired product is
obtained from someone by offering something
in return
• And for this to take place some basic things
should be satisfied viz. two parties, value of
and for the product, communicate and deliver,
accept or reject
• transaction takes place when these conditions
are satisfied, but it necessarily not be a money
transaction all the time
• What is marketed….
• Goods, services, events, experiences, persons,
places, properties, organizations, information,
ideas!
 The marketing process….

• Understand the marketplace and customer

needs and wants.
• Design a customer-driven marketing strategy.
• Construct a marketing program that delivers
superior value.
• Build profitable relationships and create
customer delight.
• Capture value from customers to create
profits and customer equity.
 The marketing process….

• Understand the marketplace and customer needs

and wants.
• Design a customer­driven marketing strategy.
• Construct a marketing program that delivers
superior value.
• Build profitable relationships and create
customer delight.
• Capture value from customers to create
profits and customer equity.
Marketing process Capture value from
Customers to
Create profits and
Customer quality

Build profitable
Relationships and
Create customer
delight

Construct a
Marketing program
That delivers
Superior value

Design a
Customer-driven
Marketing strategy

Understand
The marketplace
And customer needs
And wants
• Understanding the marketplace and consumer needs:
There are five core marketplace concepts;
1­ Needs, wants, and demands;
• Needs are states of felt deprivation. All humanity
have the same needs;
– Physical needs:
• Food, clothing, shelter, safety.
– Social needs:
• Belonging, affection.
– Individual needs:
• Learning, knowledge, self­expression
• There are five core marketplace concepts;
• Wants; are needs shaped by culture and individual
personality. Example; An American needs for food but
wants a Big Mac. A Chinese needs for food but wants frog
legs.
• Demands are wants combined with buying power.
Example; Porsche or Kia.

Marketers spends time and money for a market research to

understand the customer’s needs, wants, and demands.
• There are five core marketplace concepts;
• Wants; are needs shaped by culture and individual
personality. Example; An American needs for food but
wants a Big Mac. A Chinese needs for food but wants frog
legs.
• Demands are wants combined with buying power.
Example; Porsche or Kia.

Marketers spends time and money for a market research to

understand the customer’s needs, wants, and demands.
• 2­ Products, Services, Experiences
• consumer needs and wants are fulfilled through a
marketing offer, which is some combination of
products, services, or experiences offered to a
market to satisfy a need
• Products; tangible, like food, goods…etc.
• Services; intangible, banking, telecom…etc.
• Experiences; Brand experiences, like theater
• Marketing Myopia
• Sellers pay more attention to the specific products they
offer than to the benefits and experiences produced by the
products. They focus on the “wants” and lose sight of the
“needs.”
• An article published by Harvard Business school defined
the term “marketing Myopia”;
- Marketing myopia is true for all companies who define
their markets too narrowly. urging organizations to
define their industries broadly to take advantage of
growth opportunities. Experience shows that when a
business has redefined its market, it has continued to
grow as new targets are set .
• 3­ Value and Satisfaction
• If the performance and the customer’s experience
is lower than expectations, then customer
satisfaction is low.
• If the performance and the customer’s experience
meets expectations, then the customer is satisfied.
• If the performance and the customer’s experience
exceeds expectations, then the customer is
delighted.
• 4­ Exchange, transactions, and relationships
• Exchange.
– The act of obtaining a desired object from someone by
offering something in return.
• Transaction
­ consists of a trade values between two parties.
The goal of marketers is to build solid relationship
with customers and retaining them by delivering
superior value.
• 5­ Markets
The set of all actual and potential buyers of a
product. Sellers must search for buyers, both
buyers and sellers are carried out by marketing.
­ Elements of a Modern Marketing systems
Elements of a Modern Marketing systems

Company

Marketing Final
Supplier Intermediaries
Consumers

Competitors
• Designing a customer­ driven marketing strategy
Once it fully understands consumers and the
marketplace, marketing management can
design a customer­driven marketing strategy.
Customer­Driven Marketing;
• Divide markets into segments.
• Choose the right segment to target.
• Offer a unique value proposition.
• Differentiate your offer from competitor offers.
• Build customer value and satisfaction.
• Building long­term customer relationships
Marketing Management
The art and science of choosing target markets and
building profitable relationships with them.

Two questions should be asked here;

_ What customers will we serve? (our target)

_ How can we serve them best? ( Value)
Segmentation and Targeting
Selecting customer to serve; first dividing the market
into segments, Second select the segment to be our
target market. Porsche company target customers
with high income.
• Deciding on a value proposition; A set of benefits or
values it promises to deliver to consumers to satisfy
their needs. means the company must decide how it
will differentiate itself from other competitors.
Porsche promises driving performance and
excitement. They say” what a dog feels when the
leash breaks”.
 A philosophy should guide the marketing strategy to
any company.
The philosophy could be one or more of the following;
1. Production; affordability and availability.
2. Product -- quality and innovation.
3. Selling -- promotion and hard selling.
4. Marketing -- customer satisfaction and
relationships.
5. Societal – long-term value to both customer
and society.
 1- Production philosophy;
it holds that consumers will favor products that are
available and highly affordable. It’s effective strategy
in two situations:
-When a demand for a product exceeds the supply.
-When the product cost is too high, and improve
productivity is needed to reduce the cost, to gain
market share.
Example; Evian water, McDonalds.
2- Product philosophy;
holds that consumers will favor a products that offer
the most in quality, performance, and innovative
features.
In this case the company should focus on the
continuous improving.
Examples; Nokia Mobile, Motorola, Sony..
3- Selling philosophy;
Holds that the customer will not buy
enough of the firm’s products unless it
under-takes a large-scale selling and
promotion effort.
Example; Life-Insurance
4- Marketing philosophy;
Holds that achieving organizational goals
depends on knowing the needs and wants
of target markets and deliver value to
compete in the marketplace. The job is
not to find the right customers for your
product, but the right products for your
customers.
Dell, Marriott, Disney…
5-Societal marketing philosophy;
Balances human welfare, company profits and
consumer satisfaction
Example; Johnson & Johnson Credo “ honesty,
integrity, and people before profit”. Figure
4
Many calls from the Healthy Associations warn
people form the consequences results from Fast
Food chains.
 Starting
point Focus Means Ends

Selling Profits
Existing Selling
philosophy Factory products Promoting Through
Sales volume

Profits
Marketing Customer Integrated Through
philosophy Market needs Marketing
Customer
Satisfaction
Social Marketing philosophy
Society
(Human being)

Consumers Company
Want satisfaction (profits)
 Building Relationships
Relationships span from the basic to tight
integrated relationships.
• Successful relationships are built on:
– Financial benefits; like VIP, Airline frequent miles
– Social benefits; like member of clubs, magazines
– Structural ties; like tracking orders online.
Partner Relationship Marketing
– Every department in an organization contributes
to customer satisfaction.
– Suppliers are carefully controlled through supply
chain management.
– Strategic alliances create new opportunities to
delight customers.
• Outcomes of creating customer value;
1- Customer loyalty and retention; delighted
customers remain loyal and talk favorably to others
about the company and its products, and turn to be
life-time value.
2- share of market and share of customer; many
companies are increasing their variety of products
and services to increase their profits form existing
customers. Amazon offer videos, toys, electronics,
beside books.
3- customer equity; is the total combined customer
life-time values of all the company’s customers. They
view customers as an assets need to be maximized
 The marketing strategy (introduction) session 2

• To meet changing conditions in their industries,

companies need to look ahead and develop
long-term strategies
• Strategic planning involves developing a
strategy to meet competition and ensure long-
term survival and growth
• The marketing function plays an important role
in this process in that it provides information
and other inputs to help in the preparation of
the organization’s strategic plan
• Strategic planning is described as the process
of developing and maintaining a strategic fit
between the organization’s goals and
capabilities and its changing marketing
opportunities
• Strategic planning consists of developing a
company mission (to give it direction),
objectives and goals (to give it means and
methods for accomplishing its mission), a
business portfolio (to allow management to
utilize all facets of the organization), and
functional plans ( to carry out daily operations
from the different functional disciplines)
• No matter how well the strategic planning
process has been designed and implemented,
success depends on how well each department
performs its customer-value-adding activities
and how well the departments work together to
serve the customer
• And, The marketing department (because of its
ability to stress the customer’s view) has
become central in the implementation of most
strategic plans. Connecting to customers is
central to this process