Fundamentals of

Marketing Management

CMO Functions

Strengthen the Brands

Measure Marketing Effectiveness
Drive new Product Development
based on customer needs
Gather meaningful customer
insights
Utilise new marketing technology

New Consumer Capabilities

Increase in buyer power

Amount of information available
Ease in placing and receiving orders
Ability to compare rates
Ability to influence public opinion

New Company Capabilities

Web Based Channels

More information available for research
Speedy Internal communication
Speedy External Communication
Target Marketing and two way
communication easier

New Company Capabilities

Consumers can be reached on the

move
Mass Customisation possible
Purchase more efficient using net
based tools

Ten Commandments

Segment market, target the best

segment
Map customer needs, perceptions,
preferences, behaviour and serve with
obsessive commitment
Know major competitors
Make stakeholders partners, reward
generously
System for identifying opportunities

Ten Commandments

Insightful Long Term & Short Term

Marketing Planning
Control Product and Service Mix
Build Strong Brands Cost Effectively
Marketing Leadership through Team
Building
Technology for Competitive Edge

Marketing Myopia
Assumptions

An ever expanding and affluent

population will ensure our growth
There is no competitive substitute for
our industrys major product
We can protect ourself through mass
production
Technical research and development
will ensure our growth

Marketing Myopia
Companies which failed

Century Textiles
HMT Watches
Indian Telephone Industries
MTNL/ BSNL
Hindustan Aeronauticals Limited
Samtel

Marketing Myopia
Companies which Succeeded

TELCO
Bajaj Auto
VSNL/ Tata Indicom
Samsung
BHEL

Theodore LevittMarketing Myopia

Company

Product
Definition

Market Definition

Xerox

Copier Company

Office Automation

Reliance

Petrochemical

Energy

Tata Motor

Automobile

Transportation

Carrier

Air Conditioning

Climate Control

Benett & Coleman

Newspaper

Media

Disney

Cartoon Pictures

Entertainment

Theodore LevittMarketing Myopia

Company

Product
Definition

Market Definition

Airtel

Cellular Phone
Service

Communication
Company

HP

Petroleum
Company

Energy Company

BHEL

Thermal/ Hydro
Power Products

Integrated Power
Products Company

IBM

Computer
Manufacturer

Integrated IT
Services Company

Company Orientation
towards the Marketplace

Company Orientation toward

Marketplace

Production Concept
Product Concept
Selling Concept
Marketing Concept

The Production Concept

The Production Concept holds that

Consumers will favour those
Products that are widely available
and low in cost.
Managers of Production Oriented
companies concentrate on
achieving high production
efficiency and wide distribution
coverage

The Product Concept

The Product Concept holds that

Consumers will favour those
products that offer the most
Quality Performance and Features
Managers of Product Oriented
Companies focus their energy on
making good products and
improving them over time

The Selling Concept

The Selling Concept holds that

Consumers if left alone will
ordinarily not buy enough of the
companys products.
The company must therefore
undertake an aggressive selling
and promotion effort

The Marketing Concept

The Marketing Concept holds that

the key to achieving the companys
goals lies in determining the needs
and wants of target markets and
delivering the desired satisfaction
more effectively and efficiently
than competitors

The Marketing Concept

Make and Sell vs Sense and

Respond
Selling is preoccupied with the
sellers need to convert product
into cash
Marketing is about satisfying the
needs of the customer by means of
the product

The Societal Marketing

Concept

The Societal Marketing Concept

holds that the companys task is to
determine the needs, wants and
interests of target markets and to
deliver the desired satisfaction
more effectively and efficiently
than competitors in a way that
preserves or enhances the
consumers and societys wellbeing

Holistic Marketing

Internal Marketing
Performance Marketing
Integrated Marketing
Relationship Marketing

Internal Marketing

Research and Development

Purchase
Manufacturing
Marketing
Sales

Internal Marketing

Logistics
Accounting
Finance
Public Relations

Performance Marketing

Financial Accountability
Social Responsibility Marketing

Integrated Marketing

Product
Price
Place
Promotion

Integrated Marketing-Product

Generic Product
Variety
Features
Quality
Design
Packaging
Sizes
Service
Warranties

Integrated Marketing-Price

List Price
Discounts
Allowances
Payment Period
Credit Terms

Integrated MarketingPromotion

Advertising
Sales Promotion
Sales Force
Public Relations
Direct Marketing

Integrated Marketing-Place

Channels
Coverage
Locations
Inventory
Transport

Relationship Marketing

Customers
Channel Partners
Financial Community
Employees

Customer Relationship
Management

Acquisition vs Retention
Targeted Customers, not Anybody
Price for Profit
High Price, High Service Levels
Total Customer Satisfaction vs
Moderately Satisfied Customers

Strategic Business Unit

Strategic Business Unit (SBU) is a profit

center which focuses on product
offering and market segment.
SBUs typically have a discrete
marketing plan, analysis of
competition, and marketing campaign,
even though they may be part of a
larger business entity.

Strategic Business Unit

Corporations may be composed of

multiple SBUs, each of which is
responsible for its own profitability

Strategic Business Unit

Hindustan Unilever

Personal Care- Dental Care

Personal Care- Soaps and Shampoos
Home Care- Detergents
Food and Drink
Water Purifier

Assessing Growth
Opportunities

Intensive Growth
Integrative Growth
Diversification Growth
Downsizing and divesting older
businesses

Strategic Planning Gap

Growth Opportunities
Ansoffs Product Market Expansion Grid

Integrative GrowthHorizantal

HUL
Samsung
Sony
Tata Motors
Titan

Integrative GrowthHorizantal

BHEL
ITC
General Electric
ICICI
Reliance Energy

Integrative Growth- Vertical

BHEL
Reliance Industries
Indian Railways
Raymonds
Reliance Energy

Diversification

ITC Welcomgroup Hotels

Apple iPod
L&T
Pepsi Lays
Mahindra
Bajaj Auto

Transaction Vs. Relationship

Marketing
Transaction Oriented

Relationship Oriented

Get New Accounts

Retain Existing Accounts

Get the order

Become the preferred supplier

Cut price to get the sale

Price for profit

Manage all accounts to maximise

short term sales

Manage each targeted account for

long term profit

Sell to anyone

Concentrate on high profit

potential accounts

Profit Impact of 5% of
Retention Rate

Core Competencies

Source of competitive advantage

Application in a wide range of markets
Difficult for competitors to imitate

Questions for Discussion

If you become the CMO of a company

what will your major priorities?

What new consumer

capabilities do marketers
have to contend with?

What new capabilities can

companies leverage

Explain the concept of

Marketing Myopia.
Identify a company which
did not succumb to
Marketing Myopia

How will you redefine the

business of a company of
your choice?

Give an example of a
company which has used
the Production Concept

Give an example of a
company which has used
the product concept

Give an example of a
company which has used
the Marketing Concept

Explain Customer
Relationship Management

End of Section