Marketing Introduction and Concepts

Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably
The Chartered Institute of Marketing

The right product, in the right place, at the right time, and at the right price

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 1991

A better definition of marketing: Marketing is War!

 The true nature of marketing today involves the conflict between corporations. Not the satisfying of human needs and wants!

What leads to defeat in both War and Marketing?

Over-pessimism (Fear of Failure) Over-optimism (Failure to Fear Failure)

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 orservice?

Why should customers buy from us?

Marketing

Is this enough? Is knowing what the customer wants enough when all of your competitors know it as well? Or is success based primarily on strategies and tactics?

Most Common Marketing Errors

Failure to keep products/services up-to-date Failure to estimate market potential accurately Failure to gauge the trend of the market Failure to appreciate regional differences in market potential and in trend of market Failure to appreciate seasonal differences in your customers demand

Most Common Marketing Errors

Failure to establish the advertising budget based on the job to be done Failure to adhere to policies established in connection with long-range goals Failure to test-market new ideas Failure to differentiate between long-term strategies and short-term tactics Failure to admit defeat

Most Common Marketing Errors

Failure to try new ideas while a brand is climbing Failure to integrate all phases of the marketing operation into the over-all program Failure to appraise objectively your competitors brands Failure to get the facts and interpret them correctly

Good Marketing professionals need to understand the nature, causes,and cures of marketing failures

WE'RE NOT DELTA - BUT WE'RE TRYING TO FLY!

"We want to be like Delta!" proclaimed Anatoly Brylov, Chief Executive of the Russian airline Aeroflot in an interview with Time Magazine. That's quite an easy thing to say, but poses such an enormous challenge for an airline that has been struggling to come to terms with marketing. Delta has grown steadily from its 1920s origins as a southern crop spraying company to be the USA's number 3 airline. By all accounts, it is popular with its customers and it has to be, for most of its routes are operated in competition with other airlines. Aeroflot by contrast has been associated with everything that is anathema to the management of Delta. During the Soviet era, travel on Aeroflot had been so dire that the airline - disparagingly referred to as "Aeroflop", was frequently described as "the world's worst airline".

WE'RE NOT DELTA - BUT WE'RE TRYING TO FLY!

The contrast between Delta and Aeroflot can be explained in terms of the extent to which the two airlines have adopted a marketing orientation. Delta has had to fully embrace the principles and practices of marketing because if it didn't, competitors who did would soon win over customers. Aeroflot on the other hand traditionally had little need for marketing. It operated in a centrally planned economy where consumer sovereignty had little meaning. If a passenger wanted to fly somewhere, they usually had no choice but to fly with Aeroflot. Aeroflot's managers were not really concerned with attracting more passengers or making life better for their existing passengers - they saw themselves just like any other government bureaucrat who was charged with implementing a centrally planned economic program. So long as they met very loosely defined targets, they were OK. The targets themselves weren't marketing targets at all but operational targets referring to the number of flights operated or the fuel consumption of aircraft. There was little concern for whether the flights were going to the right places at the right times, or with the right level of facilities before, during and after the flight.

WE'RE NOT DELTA - BUT WE'RE TRYING TO FLY!

In a communist centrally planned economy, it was not surprising to find Aeroflot adopting a production orientation to its business. Operational considerations came first, customers came second. Stories abounded about what this actually meant for passengers. Planes were known to leave late because members of the crew were drunk, baggage was routinely stolen by ground staff and ticketing and reservations system were corrupt and inefficient. It was commonplace for passengers to bribe flight attendants to be allowed on an aircraft, even though all seats were full. As for in-flight services, there weren't any, unless warm water in plastic cups is counted. The break up of the former Soviet Union and the rapid disintegration of the centrally planned economy propelled Aeroflot into a new era in which marketing took on significance for the first time. The spur to marketing was the withdrawal of the heavy subsidies that the airline received from the government - the airline now had to earn all of its income from fares paid by passengers. And those passengers were able to exercise increasing choice as the domestic civil aviation market was opened to competition for the first time.

WE'RE NOT DELTA - BUT WE'RE TRYING TO FLY!

The first thing the new management did was to repaint its fleet of aircraft with a new name - Aeroflot Russian International Airlines. That was a skin-deep change - to achieve a true marketing orientation, the airline had to embark on much more fundamental change. Part of that fundamental change was to impress upon staff that passengers were important people whose needs had to be satisfied, rather than being brushed aside as nuisances. Staff had to be made aware that over 70 new regional airlines had appeared on the scene, many of them competing with Aeroflot for passengers' business. Many of these - such as Uzbekistan Air - had acquired modern western aircraft and put its crews through a customer care programme which even Delta might have approved of. The management structure also had to change from an authoritarian structure to one which was able to integrate operational and marketing functions, in order to allow new opportunities to be profitably exploited.

WE'RE NOT DELTA - BUT WE'RE TRYING TO FLY!

Despite the enormity of the airline's task, changes were put in hand. The aircraft fleet has being modernized, including the lease of a number of European Airbuses. This has gone some way to allay potential customers' fears over the safety record of Aeroflot's primitive Tupolev and Illuyshin aircraft, many of which have been scrapped. Locally prepared in-flight meals have been replaced with western made products. Flight attendants have been attending politeness seminars, often run in conjunction with western consultants. A number of key executives have been enrolled on western run marketing and management courses. Fares are now determined with due regard to market considerations, rather than being set according to a central plan. Marketing research is now taken very seriously to monitor customers' reactions to the airlines service levels. In short, "passengers" have become "customers" whose business can no longer be taken for granted.

WE'RE NOT DELTA - BUT WE'RE TRYING TO FLY!

Is Delta worried by the regeneration of Aeroflot? At the moment, the two airlines compete only indirectly, but over the longer term, Aeroflot has expressed its desire to become a global airline. It signed an agreement with British Airways which will help it to expand beyond its Russian base. Global success would have seemed preposterous to an observer of Delta back in 1924. But by putting customers first and adopting the principles and practices of marketing, Delta has achieved its current enviable position. With the same attitude and determination, Aeroflot could just do the same.

MARKETING VS SELLING Example: M. Institute is an institute specializing in preparing students for CAT. It opened a branch at Bhopal in June 2002. To open the branch, it recruited the following persons: Branch Manager (BM), Marketing Executive(ME), Student Counselor (SC), Operations Executive (OE) and an office boy. Faculty was not recruited initially.

BM, ME and SC were responsible for selling. OE was responsible for administration of branch including housekeeping and accounting. Due to the efforts of selling team and an aggressive advertising campaign, more than twenty enrolments were done in various courses within the first two months. Faculty recruitment was done in a hasty manner within a week of first enrolments. Students of first batch complained of poor course material, inadequately prepared faculty, and absenteeism of faculty. In the months from November 2002 to January 2003, there have been no fresh enrolments. By the end of January 2003, M. Institute had sacked its complete original selling team and had advertised for fresh executives who could give commitments about meeting targets of enrolments.

Task for Today

Newspapers have been facing declining sales all over the world due to onslaught of television in the past two decades. However, some newspapers have suffered more than others. A rare few have managed to grow in spite of difficult times. The picture seems confusing. If you have to start a new newspaper in your town, what will be the key factors that you will devote your attention to?