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Marketing Management: Swati Sisodia Swati - Sisodia@nmims - Edu
Marketing Management: Swati Sisodia Swati - Sisodia@nmims - Edu
Introduction to Marketing
What is Marketing ?
Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably
What is marketing?
The right product, in the right place, at the right time, and at the right price
What is marketing ?
Marketing is the human activity directed at satisfying human needs and wants through an exchange process
Management definition
It is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational goals.
What is Marketed?
Goods Services Events Experiences Persons Places Properties Organizations Information Ideas
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?
Total Customer Cost is the summation of: -Monetary Cost -Time Cost -Energy Cost -Psychic Cost
Customer Satisfaction
Is a persons feelings of pleasure or disappointment resulting from comparing a products perceived performance in relation to his or her expectations
CONSUMER BEHAVIOUR
- Consumers are the individuals engaged in the final act of using the good - Customers may be merely buying the good for the consumer
Consumer Customer + Consumer Customer
Purchase process
Initiator
Influencer
Decider
Buyer
User
Social psychology Study of how individuals influence and are influenced by groups
Economics Study of people's production, exchange, and consumption of goods and services
Benefits of Strategy
Coordinate efforts of entire company Specify what resources will go where Leads to superior market position
Setting objectives
Where do we want to go with the product?
Growth
Sales revenues Market share
Profitability
Cash flow Maximize stock value
Quality
Brand equity Satisfaction
Elements of objectives
Clearly quantified Challenging but doable Specific time frame
Definition.
Segmentation is the process of classifying customers into groups which share some common characteristic Targeting involves the process of evaluating each segments attractiveness and selecting one or more segments to enter Positioning is arranging for a product to occupy a clear, distinctive and desirable place relative to competing products in the mind of the consumer
1. Identify segmentation variables and segment the market. 2. Develop profiles of resulting segments
5. Identify possible positioning concepts for each target segment 6. Select, develop, and communicate the chosen positioning concept
Geographic
Nations, states, regions or cities
Demographic
Age, gender, family size and life cycle,
Psychographic
Social class, lifestyle, or personality
Behavioral
Occasions, benefits, uses, or responses
Dividing markets
Accessible
Accessible
Market Targeting
Once the firm has identified its marketsegment opportunities, it has to decide how many and which ones to target
Decisions relating to segment targeting are taken on the growth/ risk parameters
Criteria for well chosen markets Can be defined with some precision, a niche Well timed, within market window Customers accessible Growing fast enough Not owned by one established vendor Expansion paths to other niches Well suited to strengths
Criteria for poorly chosen markets Vague Too large Premature, or too late No clear way to reach customers Static or declining Already owned by others Not suited to strengths
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Product Differentiation
Form
Features
Performance
Quality
Conformance Quality
Durability
Reliability
Repair-ability Style
Design
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Positioning Basis
Attribute
Positioning is
the act of designing the companys offering and image to occupy a distinctive place in the target markets mind relative to competitors Positioning Basis
Use or Application
Product User
Competitor
Product management
HLL perspective
Length
Total number of items the company carries
Depth
Number of versions offered of each product in the line HLL: Toothpaste has close-up as a brand with Blue and Red variants
Consistency
Closeness of end use, production etc.
A typical case
Sales
Product Development
Exercise Which phase of product life cycle shall we place the following products?
1. 2. 3. 4. Desktop Laptop Mobile Tablet PC
Creating reputation
A brand is name, term, sign, symbol or design or a combination of them used to signal value and differentiate offerings
Branding
Corporate brands
Umbrella brands
Multi brands
Pricing Strategies
Pricing strategy will depend mainly on Targeted segment Expected positioning Growth plans Profitability expectation etc.
Pricing Strategy
how does a company decide what price to charge for its products and services? what is the price anyway? doesnt price vary across situations and over time? some firms have to decide what to charge different customers and in different situations they must decide whether discounts are to be offered, to whom, when, and for what reason
Penetration
Competitive Psychological
ACTIVITY
Marketing Mix
The marketing mix principles are controllable variables which have to be carefully managed and must meet the needs of the defined target group. All elements of the mix are Linked and must support each other.
PRODUCT Product refers to the functions and features of a good or service Should satisfy the needs of the customer May have a Unique Selling Proposition (USP) Product also includes a range of factors such as packaging, quality, warranties, after-sales service and branding
PRICE The price of a product will depend on: The cost to make it The amount of profit desired Other objectives of the business The price competitors charge The price customers are willing to pay Is there a high demand? Is demand sensitive to changes in price?
PROMOTION The aims of promotion are to: Raise awareness Encourage sales Create or change a brand image Maintain market share
The use of e-commerce (promoting and selling on the internet) has grown massively over the last few years
Channels of distribution
Manufacturers Wholesaler Retailer Consumer
Promotion Strategy
Above-the-line promotion This uses advertising media over which a firm has no direct control e.g. television, radio and newspapers Below-the-line promotion This uses promotional media which the firm can control e.g. direct mail, sales promotions and sponsorship
Marketing Communications
Communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response not only informs, but is also used
Purposes of Marketing Communications to differentiate the sellers products/services Informs, persuades and reminds Is part of the marketing mix Includes all the means by which a company communicates directly with potential customers. Atempts to influence feelings, beliefs, or behaviour.
BCG Matrix
BCG MATRIX
MARKET SHARE
Market share is the percentage of the total market that is being serviced by your company, measured either in revenue terms or unit volume terms.
STARS
High growth, High market share
Stars are leaders in business. They also require heavy investment, to maintain its large market share. It leads to large amount of cash consumption and cash generation. Attempts should be made to hold the market share otherwise the star will become a CASH COW.
They are foundation of the company and often the stars of yesterday. They generate more cash than required. They extract the profits by investing as little cash as possible They are located in an industry that is mature, not growing or declining.
DOGS
Low growth, Low market share
Dogs are the cash traps. Dogs do not have potential to bring in much cash. Number of dogs in the company should be minimized. Business is situated at a declining stage.
QUESTION MARKS
High growth , Low market share
Most businesses start of as question marks. They will absorb great amounts of cash if the market share remains unchanged, (low). Why question marks? Question marks have potential to become star and eventually cash cow but can also become a dog. Investments should be high for question marks.
BENEFITS
BCG MATRIX is simple and easy to understand. It helps you to quickly and simply screen the opportunities open to you, and helps you think about how you can make the most of them. It is used to identify how corporate cash resources can best be used to maximize a companys future growth and profitability.
LIMITATIONS
BCG MATRIX uses only two dimensions, Relative market share and market growth rate. Problems of getting data on market share and market growth. High market share does not mean profits all the time. Business with low market share can be profitable too.
Exercise
Lets work out the BCG model for Maruti Suzuki
Though BCG MATRIX has its limitations it is one of the most FAMOUS AND SIMPLE portfolio planning matrix , used by large companies having multi-products.