Marketing Management and

Services Marketing

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 MODULE 1
Introduction- Marketing and Marketing Management,
importance, value and scope of marketing.
Core marketing concepts – Needs, Wants, and Demands;
Target markets, Positioning, Segmentation, Marketing
orientations, marketing mix and classification of goods and
services.
Marketing management process(in brief)
CASE STUDY

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 Learning Objectives

• Define marketing
• Explain the importance of understanding the marketplace and
customers and identify the five core marketplace concepts.
• Steps in the marketing process
• Case study

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 What is Marketing?
Marketing is about identifying and meeting human and social
needs.

One of the shortest good definitions of marketing

is
―meeting needs profitably‖.

The twofold goal of marketing is:

• to attract new customers by promising superior value

• to keep and grow current customers by delivering value
and satisfaction.
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 For example,
Nike – delivers on its promise to inspire and help everyday
athletes to ―Just do it.‖

Amazon dominants the online marketplace by creating

a
world-class online buying experience that helps customers to
―find and discover anything they might want to buy online.‖

Facebook has attracted more than 1.5 billion active web and
mobile users worldwide by helping them to ―connect and
share with the people in their lives.‖

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 The American Marketing Association offers the following
formal definition : Marketing is the activity, set of institutions ,
and processes for creating, communicating, delivering, and
exchanging offerings that have value for customers , clients,
partners , and society at large.

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 Importance of marketing
OBJECTIVE: Understand why marketing is important both within and outside the
firm

Successful firms integrate marketing their

throughout so that marketing activities coordinate with other
organizations
functional areas such as product design, production, logistics,
and human resources, enabling them to get the right product to
the right customers at the right time.

Marketing helps facilitate the smooth flow of goods through

the supply chain, all the way from raw materials to the
consumer. From a personal perspective, the marketing function
facilitates your buying process and can support your career
goals.

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 Marketing also can be important for society through its
embrace of solid, ethical business practices. Firms ―do the right
thing‖ when they sponsor charitable events, seek to reduce
environmental impacts, and avoid unethical practices; such
efforts endear the firm to customers.

Finally, marketing is a cornerstone of

entrepreneurialism. Not only have many great companies been
founded by outstanding marketers, but an entrepreneurial spirit
pervades the marketing decisions of firms of all sizes.

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 Scope of marketing

(Scope of marketing is concerned with what is marketed & who

markets )

WHAT IS MARKETED?
Marketing people market 10 types of entities: Products,
Services, Events, Experiences, Persons, Places, Properties,
Organizations, Information and Ideas.

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 PRODUCT – Philip Kotler defines a Product as anything which
can be offered to a market to satisfy for Attention, Acquisition,
Use or Consumption that might satisfy a want or need, including
goods, services, experiences, events, persons, places, properties,
organizations, information and ideas.

―So long as a product is not bought and consumed , it remains a

raw material or at best an intermediate‖ – Peter Drucker

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MARMKAERTKN I AGNAMGAEMNEANGTEMENT AND SERVICES
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 SERVICE - A service is an act or performance where one party
offers to another party which is essentially intangible and does not
result in the ownership of anything. Its production may or may not be
tied to a physical product.

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 EVENTS Marketers promote time-based events, such as major trade
shows, artistic performances, and company anniversaries. Global
sporting events such as the Olympics and the World Cup are promoted
aggressively to both companies and fans.

EXPERIENCES by orchestrating several services and goods, a

firm can create , stage , and market experiences.
ex., Walt Disney World‘s Magic Kingdom lets customers visit a fairy
kingdom, a pirate ship etc.

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 PERSONS - Artists, musicians, CEOs, physicians, high-profile
lawyers and financiers, and other professionals all get help from
celebrity marketers.
Celebrities such as Amitabh Bachchan, Sachin Tendulkar, Shahrukh
Khan, Akshay Kumar, Virat Kohli, Mahendra Singh Dhoni are big
brands in themselves.

PLACES - Cities, states, regions, and whole nations compete to

attract tourists, residents, factories and company headquarters. The
tourism industry is a good example of place marketing.

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MARMKAERTKN I AGNAMGAEMNEANGTEMENT AND SERVICES
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 EXPERIENCES - By orchestrating several services
and goods, a firm can create, stage, and market experiences.
An amusement park or a water park represents experiential marketing: by
taking rides in the amusement park or the water park, customers enjoy the
thrill provided by these experiences.

PROPERTIES - Properties are intangible rights of ownership

to either real property (real estate) or financial property (stocks
and bonds).

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 INFORMATION Information is essentially what books, schools, and
universities produce, market, and distribute at a price to parents,
students, and communities.

IDEAS - Every market offering includes a basic idea.

Charles Revson of Revlon once observed

"In the factory we make cosmetics; in the drugstore we sell hope."

TVS Apache
Model RTR 160 4V ― We don‘t make sports bikes, We build Race
Machines‖

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 When Walt Disney World‘s Magic Kingdom lets customers visit a
fairy kingdom, a pirate ship, or haunted house, then what is
marketed in this example?

(a) Services
(b) Events
(c) Experiences
(d) Ideas

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 WHO MARKETS?

MARKETERS AND PROSPECTS

A Marketer is someone who seeks a response – attention, a

purchase, a vote , a donation – from another party, called
prospect.

If two parties are seeking to sell something to each other, we

call them both marketers.

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 MARKETS Traditionally, a ―market‖ was a physical place
where buyers and sellers gathered to buy and sell goods.
Economists describe a market as a collection of buyers and
sellers who transact over a particular product or product class.

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 KEY CUSTOMER MARKETS

Consumer Markets – Companies selling mass consumer goods

and services.

Business Markets – Companies selling business goods and

services often face well-informed professional buyers skilled
at evaluating competitive offerings.

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 Global Markets – Companies in global marketplace navigate
cultural , language, legal, and political differences while
deciding which countries to enter, how to enter each( as
exporter, licenser, joint venture partner, contract manufacturer,
or solo manufacturer), how to adapt product and service
features to each country , how to set prices, and how to
communicate in different cultures.

Nonprofit and Government Markets

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 Role of marketing in organisations

Marketing is the activity, set of institutions, and processes for creating,

capturing, communicating, delivering, and exchanging offerings that have
value for customers, clients, partners, and society at large.

Marketing strives to create value in many ways. If marketers are to

succeed, their customers must believe that the firm‘s products and services
are valuable; that is, they are worth more to the customers than they cost.

Another important and closely related marketing role is to capture value of

a product or service based on potential buyers‘ beliefs about its value.

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 Customer Needs , Wants and Demands

• Human needs are states of felt deprivation.

They include basic physical needs for food, clothing, warmth, and safety;
social needs for belonging and affection; and individual needs for
knowledge and self-expression.

• Wants are the form human needs take as they are shaped by culture
and individual personality. ( ‗specific needs‘)

• Demand : Human wants that are backed by buying power.

Given their wants and resources, people demand products and

services with benefits that add up to the most value and satisfaction.

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 Target market : Target market the part of the
qualified available market the company decides to pursue.

Marketing Management:
Marketing Management is the art and science of choosing
target markets and building profitable relationships with them.

Hint: The marketing manager‘s aim is to engage, keep, and grow target
customers by creating, delivering, and communicating superior customer
value.

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 Market offerings – Products, Services, and Experiences
Some combination of products, services, information, or experiences
offered to a market to satisfy a need or a want.
( market offerings are not limited to Physical products. They also include services – activities
or benefits offered for sale)

Marketing myopia

• This concept was proposed by Professor Theodore Levitt in his

article entitled ‗Marketing myopia‘ in the July–August 1960 issue of
the Harvard Business Review.
• The mistake of paying more attention to the specific products a
company offers than to the benefits and experiences produced by
these products.

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 Exchanges and Relationships

• Marketing occurs when people decide to satisfy their needs and

wants through exchange relationships. Exchange is the act of
obtaining a desired object from someone by offering something in
return.

• Marketing consists of actions taken to create, maintain, and grow

desirable exchange relationships with target audiences involving a
product, service, idea, or other object.

Markets
The concepts of exchange and relationships lead to the concept of a
market. A market is the set of actual and potential buyers of a
product or service. These buyers share a particular need or want that
can be satisfied through exchange relationships.

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 Marketing channels
To reach a target market, the marketers uses three kinds of
marketing channels.
Communication channels deliver and receive messages from target
buyers.
ex., newspapers, magazines, radio, television, internet etc.,
Distribution channels help display , sell, or deliver the
physical product or service(s) to the buyer or user.
ex., distributors, wholesalers, retailers, agents or intermediaries.
To carry out transactions with potential buyers, the marketers also
uses service channels
ex., warehouses , transportation companies, banks , and insurance
companies.

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 Value and Satisfaction
Value, a central marketing concept, is primarily a combination of quality,
service, and price(qsp), called the customer value triad. Value perceptions
increase with quality and service but decrease with price.

Satisfaction reflects a persons‘ judgment of a product‘s

perceived performance in relationship to expectations .

Supply Chain
The supply chain is a channel stretching from raw materials to components to
finished products carried to final buyers.

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 Competition
Competition includes all the actual and potential rival offerings
and substitutes a buyer might consider.

Marketing Environment
The marketing environment consists of task environment and the
broad environment.
Task environment ( Micro environment): company,
suppliers, distributors, dealers, and target customers.
Broad environment(Macro environment): demographic
environment, economic environment, social-
environment, natural environment, technologicalcultural
environment, and political-legal environment.

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 Marketing Management Orientations

Marketing management wants to design strategies that will

engage target customers and build profitable relationships with
them.
But what philosophy should guide these marketing strategies?
What weight should be given to the interests of customers, the
organization, and society? Very often, these interests conflict.

There are five alternative concepts under which organizations

design and carry out their marketing strategies: the production,
product, selling, marketing, and societal marketing concepts.

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 The Production Concept.

One of the oldest concepts in business.

The production concept holds that consumers prefer products
that are widely available and inexpensive.

Focus : What can we make or do best?

Useful : Marketers use this strategy when they want to expand

the market.

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 Demerit: Production concept can lead to marketing myopia.
Companies adopting this orientation run a major risk of
focusing too narrowly on their own operations and losing sight
of the real objective—satisfying customer needs and building
customer relationships.

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 The Product Concept
The product concept holds that consumers will favor products that
offer the most in quality, performance, and innovative features.

Marketing Strategy : the organization should devote its energy to

making continuous product improvements.

utility
• This encourages product innovation, research and
development and quality assurance.
concept
• Service-oriented product organizations the product
follow concept in marketing their products.

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 The Selling Concept.

Many companies follow the selling concept, which holds that

consumers will not buy enough of the firm‘s products unless it
undertakes a large-scale selling and promotion effort.

Focus: How can we sell more aggressively?

Utility
• The selling concept is typically practiced with unsought goods—those that
buyers do not normally think of buying, such as life insurance or blood
donations.
• Used for new products.
• Technical products where selling efforts are needed.

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 Marketing Strategy
These industries must be good at tracking down prospects and selling them
on a product‘s benefits.

Criticism
This concept attempts to narrow down marketing to the function of selling.

Such aggressive selling, however, carries high risks. It focuses on creating

sales transactions rather than on building long-term, profitable customer
relationships.

The aim often is to sell what the company makes rather than to make what
the market wants. It assumes that customers who are convinced into buying
the product will like it. Or, if they don‘t like it, they will possibly forget
their disappointment and buy it again later.

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 The Marketing Concept
The marketing concept holds that achieving organizational
goals depends on knowing the needs and wants of target
markets and delivering the desired satisfactions better than
competitors do.

Instead of a product-centered make-and sell philosophy, the

marketing concept is a customer-centered sense-and-respond
philosophy.

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 The job is not to find the right customers for your product but
to find the right products for your customers.

Focus: What do customers need and want ?

The marketing concept emerged in the mid-1950 as

a
customer-centered , sense-and-respond philosophy.

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 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 promotion to obtain profitable
sales.
In contrast, the marketing concept takes an outside-in
perspective.

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 The marketing concept includes the following:
1.Focusing on customer wants and needs so that the organization can
distinguish its product(s) from competitors‘ offerings
2.Integrating all the organization‘s activities, including production, to
satisfy customer wants
3. Achieving long-term goals for the organization by
satisfying
customer wants and needs legally and responsibly
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 The Societal Marketing Concept :
The idea that a company‘s marketing decisions should consider consumers‘
wants, the company‘s requirements, consumers‘ long-run interests, and
society‘s long-run interests.
Focus: What do customers want and need, and how can we benefit society?

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 The societal marketing concept holds that marketing strategy should
deliver value to customers in a way that maintains or improves both
the consumer‘s and society’s well-being. It calls for sustainable
marketing, socially and environmentally responsible marketing that
meets the present needs of consumers and businesses while also
preserving or enhancing the ability of future generations to meet
their needs.

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 Marketing Mix

• The set of tactical marketing tools – product, price, place, and promotion –
that the firm blends to produce the response it wants in the target market.

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 The major marketing mix tools are classified into four broad
groups, called the four Ps of marketing: product, price, place,
and promotion.

To deliver on its value , the firm must first create a

need- satisfying market offering (product).

It must then decide how much it will charge for the offering
(price) and

How it will make the offering available to target consumers

(place).

Finally, it must communicate with target customers about the

offering and persuade them of its merits (promotion).
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 Importance and Need of Marketing Mix
An organisation utilises different strategies to influence the
demand of its offerings. The 4P‘s must be well utilised in
relation to one another to avoid conflict in minds of buyers. A
good quality product in a luxury market cannot have high
price and a large discount at the same time.

These elements should be adjusted regularly to meet the needs

of the target market. The importance of Marketing Mix in
marketing strategy is given below

(1) Influencing demand – the 4P‘s are best utilised with

proper mix to counter competition, attract customers and
promote sales.

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 (2)Better use of resources – it helps in bringing efficiency in
utilization of the resources available with the organisation. The
investment of time and resources is done basis the customers‘
needs. This also brings cost effectiveness.

(3)Effectiveness in Marketing – proper analysis results in

effective decision making process. The management is able to
prioritise the steps to be taken for successful implementation
of strategies. It helps in focusing attention on the needs of the
market.

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 (4)Balanced implementation – Marketing mix is a very
effective tool in keeping a balanced approach and keeping the
organisation on the right track. The marketing manager is able
to make decisions on which variable of marketing mix to be
stressed upon.

(5)A balance of each Marketing Mix elements – the 4P‘s are

individually significant but a balanced mix of these results in
the success of the marketing objectives. Marketing managers
decide changes to these based on long term changes and short
term changes. In short term changes, the changes can be made
to Price, Promotion than the changes in the Place variable
(distribution channels) which cannot be changed on the go.

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 There is another concern, however, that is valid. It holds that
the four Ps concept takes the seller‘s view of the market, not
the buyer‘s view. From the buyer‘s viewpoint, in this age of
customer value and relationships, the four Ps might be better
described as the four As:

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 Under this more customer-centered framework,
• acceptability is the extent to which the product exceeds customer
expectations;
• affordability the extent to which customers are willing and able to
pay the product‘s price;
• accessibility the extent to which customers can readily acquire the
product; and
• awareness the extent to which customers are informed about
the product‘s features, persuaded to try it, and reminded to
repurchase.

The four As relate closely to the traditional four Ps.

Product design influences Acceptability
Price affects Affordability
Place affects Accessibility
Promotion influences Awareness
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 SEGMENTATION, TARGETING & POSITIONING
(STP)

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 Segmentation
Segmentation is the process of dividing a
Heterogeneous market into a Homogeneous sub-unit.

Market Segmentation - Marketing is done to a group

of people who share a similar set of Needs and Wants.

Definition: Dividing the market by grouping the customers

with similar tastes and preferences into one segment is
called market segmentation (or) dividing the market or
customers having similar needs, wants, tastes, preferences is
known as market segmentation.

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 Three Stages of Market Segmentation

1. Survey Stage - This is divided into two parts

1.Focus Group Discussions - , with a view of getting insight

into consumer motivation, attitudes and behaviour

2.In Depth Interviews - with a view of developing

Questionnaire which is administered to a sample group of
consumers.

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 2. Analysis Stage - After collecting the data, it is analysed using
factor analysis. This is used to identify factors that differentiate
customer groups. Cluster analysis is now used to cluster
customers into maximally different groups.

3. Profiling Stage – In this stage, each cluster is profiled in terms

of demographics, psychographics, media habits, attitudes,
behaviour and consumption habits. The marketer can give each
segment a name based on a dominant distinguishing
characteristic.

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 Benefits of Market Segmentation

1. Understanding the needs of Consumers

2. To adopt better positioning strategies
3. Proper allocation of marketing budget
4. Helps in preparing a better competitive strategy
5. Provides guidelines in preparing media plan of company
6. the
Different offerings in different segments enhance the sales
7. Customer gets more customized product
8. Helps Company to identify niche markets
9. Provides opportunities to expand market
10. Encourages innovation

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 Targetin
g Targeting is defined as a group of people or organizations for
which an organization designs, implements and maintains the
marketing mix.

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 Targeting Approaches

1. Undifferentiated Marketing
• called as Mass marketing

• This type of marketing strategy is characterised by market

aggregation (shotgun approach)

2. Concentrated marketing strategy

This type of strategy consists of focusing on a „part‟ of the market.
Concentrated marketing may, sometimes, go well with polycentric
orientation also; disadvantage of it is risk of keeping all the eggs in one
basket.
ex: Niche marketing

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 3. Differentiated marketing strategy

• This type of marketing differentiates its marketing effort

or marketing mix on the basis of requirements.
• This type of marketing strategy is characterised by
market
segmentation (rifle approach)

4. Micro marketing
• This is an extreme form of segmentation, where a marketer tailors a
product/service to suit an individual needs and wants.
• This is also called as ‗one-to-one marketing‘.

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 Positioning
In marketing, positioning / product positioning is the process
by which marketers try to create an image or identity in the
minds of their target market for its product , brand or
organisation.
Or
The process of establishing and maintaining a distinctive place
in the market for an organization or its specific product offers
is known as Positioning.

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 Marketing Management Process

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 2.1 Selecting Customers to Serve

The company must first decide whom it will serve. It does this
by dividing the market into segments of customers (market
segmentation) and selecting which segments it will go after
(target marketing).

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 2.2 Choosing a Value Proposition
The company must also decide how it will serve targeted
customers—how it will differentiate and position itself in the
marketplace. A brand’s value proposition is the set of benefits
or values it promises to deliver to consumers to satisfy their
needs.
Facebook helps you ―connect and share with the people in
your life,‖
YouTube ―provides a place for people to connect, inform, and
inspire others across the globe.‖
BMW promises ―the ultimate driving machine‖

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 Vibram FiveFingers
shoes promise the best
of two worlds—
running with shoes
and without. ―You get
all the health and
performance benefits
of barefoot running
combined with
Vibram a sole
protects that
from
you elements and
obstacles in your
path.‖ Vibra
FiveFingers
With m
―The more itshoes,
Value propositions: With Vibram FiveFingers shoes, “You are the technology.”
like a foot, the more it
looks
acts like a foot.‖

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 4.1 Customer Relationship Management
Customer relationship management is the
perhaps most
important concept of modern marketing.
Customer relationship management is the overall process of
building and maintaining profitable customer relationships by
delivering superior customer value and satisfaction. It deals
with all aspects of acquiring, engaging, and growing
customers.

Customer satisfaction
The extent to which a product‘s perceived performance matches a
buyer‘s expectations.

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 Assignment questions
1 Define marketing and what are its primary goals.
2 Explain the importance of understanding customers and the
market place, and identify the five core marketplace concepts
( Hint: The core marketplace concepts are needs, wants, and demands; market offerings (products, services,
and experiences); value and satisfaction; exchange and relationships; and markets.)

3 Explain the steps in the marketing process.

4 What are the five different marketing management
orientations? Justify each of them with appropriate examples
and state why that orientation is relevant today.
5 What is marketing myopia? What are the short- and long term
implications for business in this situation?

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 Short notes
• Marketing
• Needs
• Wants
• Demands
• Market offerings
• Marketing myopia
• Exchange
• Market
• Marketing management
• production concept
• product concept
• Selling concept
• Marketing concept
• Societal marketing concept
• Customer relationship management
• Customer satisfaction

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 THANK
YOU
Dr.Sujay M.J
Assistant
Professor
DHSMS, JSS
Academy of
Higher Education
& Research
Mysuru 570 015

sujay.dhsms@jssuni.edu.in
74 MARKETING MANAGEMENT AND SERVICES MARKETING
sujay15@gmail.com