Marketing Management

Module 1
 Marketing Management

Nature of Marketing

 Why we have to study marketing?

 What core concepts underlie the discipline of marketing?

 What basic tasks do marketing people perform?

 What is the marketing concept and how it differs with other

philosophies?

 What role does marketing play in different industries?

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Scope of Marketing
The Global Economy
 The Income Gap

 The Environmental Imperative and Socially Responsible

Marketing
 Technological Advances &

 The Customer
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Marketing Defined

“Marketing is a social and a managerial process by

which individuals and groups obtain what they need
and want through creating, offering and exchanging
products of value with others”
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The above definition of marketing rests on:

Value, Cost
Needs, Wants Products (Goods,
&
& Demands Services & Ideas
Satisfaction

Exchange
&
Transactions

Marketers Relationships
& Markets &
Prospects Networks
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Marketing Management Defined

“Marketing Management is the process of planning

and executing the conception, pricing, promotion and
distribution of ideas, goods, services to create exchanges
that satisfy individual and organisational goals”
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Five Competing concepts

 The Production Concept
“The production concept holds that consumers will
favor those products that are widely available and low in
cost”.
 The Product Concept
“The product concept holds that consumers will favor
those products that offer the most quality, performance or
innovative features”.
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 The Selling Concept/Sales Concept

“The selling concept holds that consumers, for the
products which is unsought good”.
 The Marketing Concept
“The marketing concept holds that the key to
achieving organisational goals consists of being more
effective than competitors in integrating marketing
activities toward determining and satisfying the needs
and wants of target markets”.
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 The Societal Marketing Concept

“The societal marketing concept holds that the
organisation’s task is to determine the needs, wants
and interest 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 the society’s well-being”.
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 The Societal Marketing Concept

Society – Human welfare, Environment

Societal
Marketing Concept

Consumers – Needs, Wants, Company – Sales Volume,

Satisfaction Profits, Growth
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MARKETING VERSUS SELLING

 The basic difference between marketing and selling lies in
the attitude towards business.
 The selling concept takes an inside-out perspective.
 It starts with the factory, focuses on the company’s existing
products, and calls for heavy selling and promoting to
produce profitable sales.
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 The marketing concept takes an outside-in

perspective.
 It starts with a well-defined market, focuses on
customer needs, coordinates all the activities that
will affect customers, and produces profits
through creating customer satisfaction.
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 The Concept of Exchange
At Least Two
Parties Something of
Value

Necessary Ability to
Communicate
Conditions Offer
for Exchange
Freedom to
Accept or Reject
Desire to Deal
With Other Party
The Concept of Exchange

The idea that people give

up something to receive
something they would
rather have.
 Conditions for Exchange
 There must be at least two parties
and each party…

 Must have something the other party values

 Must communicate and deliver goods
 Must be free to accept or reject offer
 Must want to deal with other party
The Concept of Exchange

 Exchange may not take place

even if conditions met

 An agreement must be
reached

 Marketing occurs even if

exchange does not take place
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Elements of Marketing Concept

The marketing concepts rests on four pillars
 Target Market

 Customer Needs

 Integrated Marketing

 Profitability
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 What are customer value and satisfaction?

 How the companies produce and deliver them?
 How companies attract and retain customers?
 How companies improve customer profitability?
 How companies practice Total quality marketing?
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Customer Value
Total Customer Value: Product value, services value,
personnel value and image value.
Customer Value = Total benefits – total costs

Total Customer Cost: Monetary cost, time cost, energy

cost, psychic cost
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Customer Satisfaction
“Satisfaction is person’s feelings of pleasure or
disappointment resulting from comparing a product’s
perceived performance (outcome) in relation to his or
her expectations”.
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Value Chain:
Bringing the material in the business, converting them
into final products, shipping, marketing and finally
servicing.

Value Delivery Network:

Needs to competitive advantage: Suppliers value
chains, distributors and customers.
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Customer Retention:
“Intent in developing strong bonds and loyalty with
their ultimate customers”.
 Losing profitable customers can dramatically impact a
firms profits.
 The cost of attracting a new customer is estimated to be
expensive than cost of keeping the existing customer.
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Relationship Marketing:
“Practice of building long-term satisfying
relations with key parties – Customers, suppliers,
distributors - in order to retain their long-term
preference and business”.
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Total Quality Marketing:

“Quality is the totality of features and
characteristics of product or service that bear on its
ability to satisfy stated or implied needs”.
Total quality is the key to value creation and
customer satisfaction.
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Scanning The Marketing Environment

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Micro Environment (Internal Environment)

Suppliers, Intermediaries, Competitors,
Customers and the Publics who affect the
performance of the company

Macro Environment (External Environment)

Demographic, Economic, Social & Cultural,
Political, Technological, Natural environment
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 The Demographic Environment:

Demography is the study of populations in
terms of size, distribution, density and age.
– Age structure of a country
– Geographic distribution of its population
– Balance between male and females
– Likely future size of the population and its
characteristics
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 The Economic Environment: Consumers

with high per capita income and purchasing
power.
 The total purchasing power is a function of gross
income, take home income, disposable income,
savings and credits.
 The Government's economic policies, political
stability, political ideology and international
political scenario.
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 The Technological Environment:

– Biggest impact that the society has been
undergone in the last 30-40years
– Innumerable changes in human lives
– Changes in science, medicine, entertainment,
communication, travel or office equipment
– Sea change in product and services
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 The Political and Legal Environment:

– The Political system and the environment of
a country immensely affects the marketing
system
– Government laws and legal practices will
depend upon the political system of the
country (taxes and duties)
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 The Social & Cultural Environment:

Environmental Scanning & Monitoring
Techniques
 Tools
SWOT

PEST Techniques QUEST

Industry Competitor
Analysis Analysis
SWOT
(Strength-Weakness-Opportunity-Threat)

 The SWOT analysis is an extremely useful tool for

understanding and decision-making for all sorts of
situations in business and organizations. SWOT is
an acronym for Strengths, Weaknesses,
Opportunities, Threats. Information about
the origins and inventors of SWOT analysis is
below. The SWOT analysis headings provide a
good framework for reviewing strategy, position
and direction of a company or business
proposition, or any other idea.
 PEST
Political-Economic-Social-Technological

 PEST analysis stands for

"Political, Economic, Social,
and Technological analysis" and describes a
framework of macro-environmental factors
used in the environmental scanning
component of strategic management.
 PESTEL
 Industry Analysis
 Industry analysis is a tool that facilitates a
company's understanding of its position relative to
other companies that produce similar products or
services.
 Understanding the forces at work in the overall
industry is an important component of effective
strategic planning. Industry analysis enables small
business owners to identify the threats and
opportunities facing their businesses, and to focus
their resources on developing unique capabilities
that could lead to a competitive advantage.
 Competitor Analysis

 Competitor analysis in marketing and strategic

management is an assessment of the strengths and
weaknesses of current and potential competitors.
This analysis provides both an offensive and
defensive strategic context through which to
identify opportunities and threats. Competitor
profiling coalesces all of the relevant sources of
competitor analysis into one framework in the
support of efficient and effective strategy
formulation, implementation, monitoring and
adjustment.
 Features of business environment
 Totality of external forces: Business
environment is the sum total of all things
external to business firms and, as such, is
aggregative in nature.

 Specific and general forces: Business

environment includes both specific and general
forces. Specific forces affect enterprises in
their day-to-day working. General forces have
impact on all enterprises and affect an
individual firm only indirectly.

 Dynamic nature: Business environment is
dynamic in that it keeps on changing
whether in terms of technological
improvement, shifts in consumer
preferences or entry of new competition in
the market.

 Uncertainty: Business environment is

largely uncertain as it is very difficult
to predict future happenings,
especially when environment changes
are taking place too frequently as in
the case of information technology or
fashion industries.

 Marketing to 21 st Century
Customer
 Holistic approach
 Social Marketing
 Green Marketing
 Social Responsible Marketing
 Innovative marketing approaches
Marketing Management
 Marketing Management
• Marketing Challenges in the
Globalised Economic Scenario
 Marketing Tasks

 Developing Marketing Strategies and Plans

Identifying potential long run opportunities
 Assessing Market Opportunities and Customer
Value Spot profitable market opportunities and
how to best create value for chosen target markets
 Choosing Value
 Designing Value Deciding on wholesale and retail
prices, discounts, allowances, and credit.
 Marketing Tasks

 Delivering Value How to properly deliver

to the target market
 Communicating Value Adequate
communication to the target market.
 Sustaining Growth and Value Initiate new
product development, testing and launching
as a part of long term