Marketing

Chapter Questions
Why is marketing important? What is the scope of marketing? What are some fundamental marketing concepts? How has marketing management changed? What are the tasks necessary for successful marketing management?

Good Marketing is No Accident

The roaring success of four-wheeler Tata Ace, in a market earlier dominated by threewheeler load carriers, was due to a deep understanding of the market needs and customer requirements.

What is Marketing?
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.

What is Marketing Management? 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.

Selling is only the tip of the iceberg

There will always be a need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed is to make the product or service available. Peter Drucker

Marketing Can Promote Ideas

Demand States
Negative Nonexistent Latent

Declining

Irregular

Full

Overfull

Unwholesome

Key Customer Markets

Consumer Markets Global Markets

Business Markets

Nonprofit/ Government Markets

Functions of CMOs
Strengthening the brands Measuring marketing effectiveness Driving new product development based on customer needs Gathering meaningful customer insights Utilizing new marketing technology

Improving CMO Success

Make the mission and responsibilities clear Fit the role to the marketing culture and structure Ensure the CMO is compatible with the CEO Remember that show people don t succeed Match the personality with the CMO type Make line managers marketing heroes Infiltrate the line organization Require right-brain and left-brain skills

Positioning
Press ads of the Scorpio focused on the functional features of the vehicle and the television ads focused on emotional benefits.

The marketplace isn t what it used to be

Information technology Globalization Deregulation Privatization Competition Convergence Consumer resistance Retail transformation

RBC emphasizes a relationship marketing approach

New Consumer Capabilities

A substantial increase in buying power A greater variety of available goods and services A great amount of information about practically anything Greater ease in interacting and placing and receiving orders An ability to compare notes on products and services An amplified voice to influence public opinion

Introduction to Marketing
What is Marketing? Identifying and Meeting Human & Social needs Meeting needs profitably. Marketing is all about turning private or social needs into profitable business opportunity

Introduction to Marketing
Definition of Marketing? American Marketing Association defines Marketing as an organizational function and a set of processes for creating, communicating and delivering value to a customer and managing customer relationship in ways that benefit the organization and its stake holders

Introduction to Marketing
Definition of Marketing? According to Philip Kotler Marketing Management is an art and science of choosing target markets and getting, keeping and growing customers through creating, delivering and communicating superior customer value.

Introduction to Marketing
Definition of Marketing? We can define Marketing from social and managerial view point. A social definition creates marketing s role as delivering high standard of living. A social definition serves a purpose and has been defined by kotler as A societal process by which individual and groups obtain what they need and want through creating, offering and freely exchanging products and services of values with others

Introduction to Marketing
What is Marketed?
They can market goods, services, events, experience persons, places, properties, organization, information and ideas Goods: Physical Goods Car, Truck, Television etc. Services: Airline, hotel, Car Rental etc. Events: Trade Shows, World Cup, Olympics, Beauty Pageants etc. Experience: Amusement Park, different rides in the park, thrills provided and so on.. Persons: Celebrity Marketing is the major business. Artist, Musicians, Physician, high profile Lawyer etc.

Introduction to Marketing
What is Marketed?
Places: City, States, Region, Tourism. Properties: Intangibles rights of ownership of either real properties or financial properties. Real Estate (Real Property) or financial property in stocks and bonds. Organizations: They build a strong, favorable and unique image in the minds of target public. For. e.g. Tesco super market in U.K. or WALMART in U.S. Information: Its essentially what books, schools, university produce in market Ideas: Every market offering includes a basic idea. e.g. Charles Revson of Revlon once said In the factory we make cosmetics and in the store we sell hope

Introduction to Marketing
Core Marketing Concepts Needs: are the basic human requirements like air, food and water. Wants: they are directed to specific objects that might satisfy the needs. Demand: are want for specific products backed by an ability to pay

Company Orientation towards Market Place

PRODUCTION CONCEPT Holds that the Consumer will buy a product which is
Priced Low Widely Distributed

Management s Focus : Mass production and extensive distribution Concept holds in two situations:
When demand exceeds supply and consumer wants the product and not its finer points When product s cost is high and has to be brought down by increasing production

SUCCESS THROUGH PRODUCTION CONCEPT

Henry Ford (1863-1947)

The first Model T Ford was built on September 27, 1908. Ford continued building the "T" for the next 19 years, until it was replaced by the Model "A" in 1928.

Henry Fords Vision

"I will build a car for the great multitude. It will be large enough for the family, but small enough for the individual to run and care for. It will be constructed of the best materials, by the best men to be hired, after the simplest designs that modern engineering can devise. But it will be low in price that no man making a good salary will be unable to own one-and enjoy with his family the blessing of hours of pleasure in God's great open spaces. -Henry Ford

The reality

A Ford Model T (1926) Advertisement

The Model T story

Initially the Model T came in 3 colors, red, green and gray

By 1910 Ford started painting their cars dark blue- almost black. By 1914 all the cars were painted Black to achieve maximum economies of scale. Ford was producing one car every 93 minutes!

The Model T Story

"The Customer Can Have Any Color He Wants So Long As It's Black". -- Henry Ford

The Model T story

By 1927 Ford had sold

Model Ts !
Ford Motor Co. stopped producing Model Ts in July 1927

Company Orientation towards Market Place

PRODUCT CONCEPT Holds that Consumer will buy a product which is best in :
Quality Features Performance

Management s focus : make superior products and improve them periodically

PRODUCT CONCEPT IN ACTION

Steve Jobs (1955- 2011)

In 1985 Steve Jobs resigned from Apple Computers to formed his company, Next Inc. In late 1980 s Steve Jobs introduced a new desktop computer called NeXT.

The NeXT Story

NeXT was attractive and user friendly.It was the first ever computer with a hi-fi speakers and CD-ROM reader. It was positioned as a scholars workstation . It was priced at $ 10,000 With such a steep price tag, most scholars could not afford it. It was then re-positioned as an engineers best tool . However, engineers preferred Sun Micro Systems & Silicon Graphics desktop work station, which they were using already.

The NeXT Story

The software for NeXT was not compatible with IBM or Apple , so few compatible software were available in the market. In 1993, after spending $200 million on design, development, promotion & marketing, Jobs stopped production and sale of NeXT.

Company Orientation towards Market Place

SELLING CONCEPT Holds that the consumers resist purchase and have to be coaxed to buy Management s focus : undertake aggressive selling and promotion efforts

Company Orientation towards Market Place

MARKETING CONCEPT Holds that Consumers prefer to buy a product that best satisfies their needs Management s focus : know and understand the Consumers and their needs and then produce products that satisfy their needs

Selling revolves around the needs and interests of the seller  The purpose of selling is to sell what is made rather than make what the customer wants.  Views business as a task of somehow disposing off existing products. Marketing revolves around the needs and interests of the buyer  Marketing starts with the customers.  Views business as a task of meeting the needs of the customers.

Levitt and Drucker on Marketing  Customer orientation is the essence of marketing




Is not selling a part of marketing ?

Certainly yes; but marketing recognises the futility of pushing that is inherent in the sales approach. In the marketing approach, there is no need for pushing the product on the consumers




Does not marketing seek profit just as selling does?

Yes; but selling seeks profits by pushing the products on the consumers, while marketing seeks profits by creating value satisfaction for the consumers

Company Orientation towards Market Place

HOLISTIC MARKETING CONCEPT It recognizes that everything matters in marketing It s a broad and integrated perspective Its includes 4 broad components
Relationship Marketing, Integrated Marketing, Internal Marketing Performance Marketing

Marketing Department

Senior Management

Other Department Communications

Product & Services

Channels

Internal Marketing

Integrated Marketing

Holistic Marketing
Sales Revenue

Brand & customer equity Ethics

Performance Marketing
Customers

Relationship Marketing

Environment

Legal

Community

Channel

Partners

Understanding Marketing in a New Perspective

At the end of this chapter, you should be able to appreciate that:

 There is a Need for a New Perspective in Understanding Marketing  Marketing is now Under Attack  Many Criticisms are being levelled Against Marketing s Performance  Ignoring Value Delivery Main Reason Behind Marketing s Trouble  Marketing has been Attending More to Downstream and Less to Upstream Marketing Activities  Marketing now needs a New Perspective Centred on Value

The Need for a New Perspective in Understanding Marketing

 Traditionally, texts on Marketing have addressed Marketing through the Customer cum 4P framework (Product, Place, Price and Promotion)  Discussions were centred on the Customer and the 4P  In this scheme, the crux of marketing had been denied its due prominence.  Value Delivery got blurred in the mire of marketing terminologies and prescriptions.  The problem was one of Perspective.  This Course is presenting Marketing in a new Perspective

Marketing Under Attack

 In yester years, Marketing enjoyed the pride of place in the world of business

 But in recent times, marketing has been under attack and marketing men on the firing line

Ignoring Value Delivery the Main Reason Behind Marketing s Trouble

 Where did Marketing go wrong?  It is marketing s failure to recognise value delivery as the crux of marketing that caused the trouble  Marketing men forgot that Value Delivery is the foundation of customer satisfaction and that it is by sticking to value delivery that marketing can get its practical direction

How Did Marketing Men Happen To Ignore Value Delivery ?

      Excessively Preoccupied with the 4P Framework 4P framework has been operating at a narrow, tactical level Marketing men tying up Marketing to mere implementation issues Attending More to Downstream and Less to Upstream Marketing Activities Relying Increasingly on Gimmicks and Quick Fixes Clinging Excessively to Segmentation Approach, Neglecting the Individual Needs of the Customer Making Exaggerated Product Promises

Marketing in a New Perspective

 A Paradigm Shift in Understanding Marketing has Become Imperative

 This Course Presents Marketing in a New Perspective: A Perspective Centred on Value