MARKETING MANAGEMENT

Why study marketing?

What is a market?
What is marketing?
Is selling and marketing the same ?
‘Marketing is the management process that identifies,
anticipates and satisfies customer requirements
profitably’
The Chartered Institute of Marketing

‘Marketing is an organisational function & a set of

processes for creating, communicating & delivering
value to customers & for managing customer
relationships in way that benefit the organisation &
its stake holders’.
The American Marketing Association (AMA)
‘Marketing is the human activity directed at satisfying
human needs and wants through an exchange process’

‘Marketing is a social and managerial process by

which individuals and groups obtain what they want
and need through creating, offering and exchanging
products of value with others’.

Kotler
‘meeting needs profitably’
Eg: IKEA –knock down furniture's
TATA ACE mini truck– ‘ Big on technology, small
in size’.
These 2 firms converted a private/social need into a
profitable business opportunity.
Requirements of marketing to occur
For marketing to occur, at least four factors are
required:
1.Two or more parties (individuals or organizations)
with unsatisfied needs.
2.A desire and ability on their part to be satisfied
3.A way for the parties to communicate
4.Something to exchange
Implications of marketing

-Who are our existing / potential customers?

-What are their current / future needs?
-How can we satisfy these needs?
Can we offer a product/ service that the
customer would value?
Can we communicate with our customers?
Can we deliver a competitive product or
service?
-Why should customers buy from us?
Discovering consumer needs
The first objective in marketing is discovering the needs
of prospective consumers. but this is not easy as the
consumers may not always know or be able to describe
what they need and want.
A need can be defined as a felt state of deprivation of
some basic satisfaction. primary needs occurs when a
person feels physiologically deprived of basic necessities
like food clothing & shelter. Also there are secondary
needs or acquired needs.
wants are specific satisfiers of some needs. individual
wants are shaped by culture, lifestyle & personality.
when Apple built its first Apple ll personal computer &
started a new industry, consumers didn't really know
what the benefits would be. so they had to be educated
and to learn how to use personal computers. Also
,knowing how to ask consumers the right question to
discover their real needs can be difficult.
effective marketing can clearly shape a persons wants
& tries to influence what we buy.
When the want is backed by purchasing power, it is
called Demand.
Meeting consumer needs with new products is a
challenge.
Eg: for failed products.
-new coke
-cibaca lime toothpaste
-cool cats – decorated ceiling fans by polar
industries
- Nestea - iced tea by nestle
The scope of marketing
Who markets?
Every organisation markets. Business firms involved in
manufacturing, retailing & providing services market their
offerings. Non profit organisations also engage in
marketing. places (cities, states, countries) often use
marketing efforts to attract tourists. special events or causes
use marketing to inform & influence a target audience. these
marketing activities range from govt agencies discouraging
smoking to private groups promoting social causes such as
literacy. Finally, individuals such as political candidates
often use marketing to gain attention & preference.
What is marketed?

-Goods - properties
-Services - organizations
-events - information
-Experiences - ideas
-persons
-places
Who buys & uses what is marketed?
-ultimate consumers
-organisational buyers

Who benefits?
3 specific groups that benefit from effective marketing are:
-consumers who buy
-Organisations that sell
- society as a whole
Evolution of marketing ideas
The production concept – it holds that consumers will
prefer products that are widely available & inexpensive.
Hence production oriented business concentrated on
achieving high production efficiency, low costs & mass
distribution. The central notion was that products would
sell themselves, so the major concern was production &
not marketing.
The product concept - proposes that consumer favour
products that offer the most quality, performance or
innovative features. hence the focus is on making
superior products & improving them overtime.
The selling concept – assumes that consumers will not
buy goods voluntarily unless the seller undertakes a
large scale selling & promotional effort.
The marketing concept – business shifted to a
customer centered, ‘sense-and-respond’ philosophy. The
job is not to find the right customers for your products,
but to find the right products for your customers.
-reactive market orientation – understanding and
meeting customers expressed needs.
-proactive marketing orientation – focus is on customers
latent needs.
The Holistic marketing concept – it is based on the
development, design,& implementation of marketing
programmes, processes, & activities that recognises their
breadth & interdependencies. This concept recognises that
‘everything matters’ in marketing & that a broad,
integrated perspective is often necessary. 4 broad
components characterizing holistic marketing are:
1.relationship marketing – aims to built mutually
satisfying long term relationships with key constituents in
order to earn & retain their business. four key constituents
are customers, employees, marketing partners (channels,
suppliers, distributers, dealers, agencies), and members of
the financial community (shareholders, investors,
analysts).
2. Integrated marketing – here the marketers should
design & implement any one marketing activity with all
other activities in mind. 2 key themes of integrated
marketing are that (1) many different marketing activities
communicate & deliver value and (2) when coordinated,
marketing activities maximise their joint efforts.
3. Internal marketing – to ensure that everyone in the
organisation embraces appropriate marketing principles,
especially senior management. Internal marketing is more
important than marketing activities directed outside the
company because it makes no sense to promise excellent
service before the company’s staff is ready to provide it.
Internal marketing must take place at 2 levels. At one
level, the various marketing functions-sales, advertising,
customer service, product management, marketing
research – must work together. At the second level, other
departments must embrace marketing.
4.Performance marketing -concentrates on the ethical &
legal aspects in marketing. adoption of this concept
requires the marketing decisions be made in an ethical &
socially responsible manner. companies must pay
attention not only to the short term needs of the customers
but also to their long term well being. Societal marketing
concept is a management philosophy that takes into
account the welfare of society, the organisation & its
customers.
Marketing and customer value
Marketing involves satisfying customers needs and wants.
The task of any business is to deliver customer value at a
profit while being socially responsible. In this
hypercompetitive economy only those organisations that
provide greater customer value succeed.
Michael Porter proposed the value chain as a tool for
identifying ways to create more customer value.
According to this model every firm is a synthesis of
activities performed to design, produce, market, deliver
& support its product. The value chain identifies 9
strategically relevant activities – 5 primary & 4 support
activities – that create value & cost in a specific
business. The firms task is to examine its costs &
performance in each value creating activity & to look
for ways to improve it. managers should estimate their
competitors costs & performances as benchmarks
against which to compare their own costs and
performance. A firm may create a cost advantage by
reducing the cost of individual value chain activities.
Strategic market planning
Strategy refers to a game plan that corporations employ
to compete successfully in the market place.
Levels of strategy in organisations
1.Corporate level – top management directs overall
strategy for the entire organisation.
2.Business unit level – business unit managers set the
direction for their products & markets to exploit value
creating opportunities. the strategic direction is more
specific at the business level of an organisation.
3.Functional level – groups of specialists create value
for the organisation. this is the level at which most of
the organisations work gets done – customers are
listened to, products are designed, produced etc.
Strategic market planning is a process yielding a
marketing strategy that is the framework for a
marketing plan. The aim of strategic market planning is
to adapt, adjust, or reshape on an ongoing basis the
corporations different businesses to accomplish the
target growth & profit objectives.
To ensure that they select & execute the right activities
marketers must give priority to strategic planning.
Strategic market planning is undertaken at 5 levels.
1.establishing corporate mission & objectives
2.Determining corporate & strategic business unit
strategy.
3.Setting marketing objectives
4.Developing marketing strategy
5.Developing marketing plan
Corporate mission & objectives
Activities undertaken at corporate level
1.Establishing corporate mission
2.Establishing corporate objectives
3.Establishing SBU
4.Resource allocation to SBU.
1.Establishing corporate mission
The mission statement is a long term view of what the
corporation wants to become. it describes the
corporations values, aspirations & reasons for being.
every organisations exists for a purpose. The
organisations must be able to clearly tell what is its
business? who are their customers? What offerings
should they provide to give these customers value?
eg: American railroads narrow product oriented
statement of their business ‘we are in the railroad
business’ rather than ‘transportation business’.
But Disney rightly pointed out stating that they are
not in the movie & theme park business, but it is in the
business of creating fun & fantasy for customers.
2.Establish corporate objectives
Corporate objectives are derived from its mission &
specify what the enterprises wants to achieve. objectives
should be preferably stated in quantitative terms & the
time frame should be specified. objectives can be in 2
basic areas: economic objectives & social objectives.
Economic objectives may be related to market share,
sales, profits & reduction of customer complaints. The
social objectives may relate to social commitments both
to employees & society.
3.Establishing SBU
Strategic Business Unit or SBU is understood as a
business unit within the overall corporate identity which is
distinguishable from other business because it serves a
defined external market where management can conduct
strategic planning in relation to products and markets.
When companies become really large, they are best
thought of as being composed of a number of businesses
(or SBUs). The SBU has its own business strategy,
objectives and competitors and these will often be
different from those of the parent company. An SBU may
be a division, a profit centre, a product line or a number of
related products or a single product.
4.Resource allocation to SBU
Business – portfolio analysis helps to analyse the
profitability & growth rates of different SBU’s, thereby
helping the management to decide on how to allocate
resources among different business units.
Two of the best known business- portfolio analysis
models are the Boston Consulting Group model & the
General Electric model.
THE BCG GROWTH-SHARE MATRIX

It is a portfolio planning model which is based on the

observation that a company’s business units can be
classified in to four categories:
- Stars
- Question marks
- Cash cows
- Dogs
General Electric Approach
This approach focuses on two important dimensions :
industry attractiveness & business strength.
 Strategic business unit strategy
SWOT Analysis

GOOD BAD NOW

NOW Remedy or
Maintain & stop
build

GOOD BAD
FUTURE FUTURE
Prioritize & Intercept
optimize and
counter
Growth strategies
Ansoff matrix
To portray alternative corporate growth strategies,
Igor Ansoff presented a matrix that focused on the
firms present & potential products &markets.
Accordingly there are four product- market
combinations.
-market penetration – the firm seeks to achieve
growth with existing products in their current market
segments, aiming to increase its market share.
-Market Development – the firm seeks growth by
targeting its existing products to new market
segments.
- Product Development – the firm develops new
products targeted to its existing market segments.
- Diversification – the firm grows by diversifying into
new businesses by developing new products for new
markets.
Setting Marketing objectives
Marketing objectives are determined on the basis of current
business analysis & specify what is to be accomplished
through marketing activities.
Developing marketing strategy
Refers to actions for developing, pricing, distributing &
promoting products that meet the needs of specific
customer groups. It focuses on analysing & selecting target
market & developing suitable market mix for this target
market.
Developing marketing plan
A marketing plan is a formal written document, prepared
detailing the activities essential to implement the chosen
marketing strategies. It details the implementation &
control aspects of marketing activities of an organisation.
Sample marketing plan
1.Executive summary
2.Situational analysis
3.Marketing objectives
4.Marketing strategies & tactics
5.Financial projections
6.Implementation & control
Evaluation & control of Kodak’s marketing program
Marketing Environment
The actors and forces that affect a firm’s ability to
build and maintain successful relationships with
customers.

Aspects of the marketing environment:

Micro environment: Actors close to the company

that affect its ability to serve the customers
Macro environment: Larger societal forces that
affect the whole micro environment
Actors in the Microenvironment
Microenvironment

The company-Marketing must consider other parts

of the organization including finance, R&D,
purchasing, operations and accounting.
Marketing decisions must relate to broader
company goals and strategies

Suppliers - provide the resources needed to produce

goods and services. Effective partnership relationship
management with suppliers is essential
Marketing Intermediaries - help the company to
promote, sell, and distribute its goods to final buyers.
Include resellers, physical distribution firms, marketing
services agencies and financial intermediaries

Customers - five types of markets purchase a company’s

goods and services. they are: Consumer, Business,
Reseller ,Government ,International
 Competitors - those who serve a target market with similar
products and services. Conducting competitor analysis is
critical for success of the firm.
A marketer must monitor its competitors’ offerings to
create strategic advantage

Publics - any group that perceives itself having an interest

in a company’s ability to achieve its objectives
Major Macroenvironmental Forces
Demographic Environment:
The study of human populations in terms of size,
density, location, age, gender, race, occupation and
other statistics.

Natural Environment:
Involves the natural resources that are needed as
inputs by marketers or that are affected by marketing
activities

Trends
-Shortages of raw materials
-Increased pollution
-Increased government intervention
Technological Environment
-The most dramatic force shaping our destiny
-Rapidly changing force which creates many new
marketing opportunities but also turns many
existing products extinct.
Political Environment
Consists of laws, government agencies and pressure
groups that influence or limit various organizations
and individuals in a given society
-Legislation affecting businesses worldwide has
increased
-Laws protect companies, consumers and the
interests of society
-Increased emphasis on socially responsible
actions
Cultural Environment
Made up of institutions and other forces that affect a
society’s basic values, perceptions, preferences and
behaviors. Culture influences consumers through the
norms & values established by the society in which they
live. It is the broadest environmental factor that
influences consumer behaviour.

Economic environment-
environment factors that affect consumer
buying power and patterns, like GDP, recession,
prosperity, inflation etc.