FUNDAMENTALS OF MARKETING

Prof.D.K.Sakore B.Tech, PGDM (IIM Ahmedabad)
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Prof. DK Sakore
B.Tech in 1991, PGDM (IIM,Ahmedabad) 1993 15 years in corporate life (1993-2008) Diverse experience across industries in sales and marketing Covered 17 states and several countries abroad Started as Marketing Executive, then became Area Manager, Franchise Head, Product Manager and GM (Marketing)

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Prof. DK Sakore
 Joined Indira group in JULY 2008  Also teaching at Other IGI colleges, Sinhagad and VAMNICOM  Family, Hobbies and Sports  Participative learning  Methodology – Discussions, Class exercises, Outdoor assignments, Student Presentations, Case studies, Role Plays, Ads and Videos.  Personal Interviews and GDs.

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MBA can only provide you the map. 4 . You have to decide the direction where you would like to go.

Automobiles  Hospitality IT & ITES Insurance Telecom Industrial Marketing Consumer Durables Choice of Industries Pharma Health Education Retail FMCG Real Estate Banking & F S 5 .

The success mantra Right amalgam of. Knowledge Skills Attitude Success : Combination of Talent and hard work Marketing : Toughest job physical and mental fitness (ulcer) 6 .

Tools for Success Books – Texts and others Business Newspapers. Magazines Business News (TV) and Internet Competitions and Events Summer Training (PPO) Decide : Functions and Sectors (2/3) 7 .

and Business Awareness Choice of Marketing .reasons Performance: Career and Future 8 .Past is history Best use of the facilities Academics.Last (lost) Opportunity Education . Personality.

Phillip Kotler on Marketing Marketing takes a few days to learn. but it takes lifetime to master. 9 .

What is Marketing ? • • • • Personal Selling ? Advertising ? Making products available in stores ? Maintaining inventories ? • All of this and much more !!! 10 .

Simple definition of Marketing • Meeting needs profitably • Delivery of Customer satisfaction at a profit • Delivers a higher standard of living to the society • Class Exercise : Selling vs Marketing ??? 11 .

offering & exchanging products of value with others 12 .What is Marketing? • Marketing is a social & managerial process by which individuals & groups obtain what they need & want through creating.

produce Fundamental Role Types – 4 and examples of companies ? • Necessary Conditions ?? 13 . steal. borrow.Concept of Exchange • • • • Meaning ? Options – Beg.

Conditions for Exchange • • • • • At least 2 parties Something of Value Ability to communicate the offer Freedom to accept or reject Desire to deal with other party 14 .

Core Marketing Concepts • • • • • • Need and Wants Desire and Demand Benefits and Value Market and Competition Consumer and Customer Customer Satisfaction and Delight 15 .

Core Marketing Concepts • Products and Services • Goods – Services Continuum • What is Marketed ? 16 .

What is Marketed ? • • • • • Goods and Services Events and Experiences Persons and Places Information and Ideas Properties and Organizations 17 .

What is your Target Market ? • • • • People or Organizations with Needs or wants with The ability and The willingness to BUY. 18 . A group of people that lacks any one of the above is not your target market.

Departments in a Company ??? 19 .

Departments in a Company Marketing Finance HR / Administration Production / Operations • R&D • • • • Legal Maintenance Quality Control Company Secretary Purchase / Procurement • Systems / Computer • • • • • 20 .

Sections in a Marketing department ??? 21 .

CRM Product/ Brand management • International Business 22 .Marketing Department • Marketing research • Sales • Logistics • Business Analyst • Business development • • • • Innovation Communication Services .

storage. planning. bulk breaking. promotion. packing. branding 23 . grading.Functions of Marketing • Exchange – selling and buying (assembling) • Physical Movement – transportation. building distribution network • Facilitating – Financing. market information. strategy formulation.

Approaches to Marketing • Production • Product • Sales • Marketing • Societal • Relational • HOLISTIC – components Class Exercise : examples of Companies ??? 24 .

Selling Vs Marketing • • • • Starting point Focus on needs Objective Emphasis of Organization • Dept. Relationships • • • • • • Product design Price Communication Central function Push vs Pull Terms of Planning 25 .

Concept of Marketing Myopia • • • • • • Meaning Origin Examples Reasons Learning Mis-interpretations 26 .

Marketing Myopia : Meaning • Short sighted-ness towards business • Narrow or incorrect definition of Business .leading to decline 27 .

Marketing Myopia : Origin • Theodore Levitt • 1960 – Lecturer at HBS • Re-visited 1975 28 .

Marketing Myopia : Examples • • • • • • • • • Rail roads Hollywood Studios Dry cleaning Electric utilities Grocery stores New England Textiles Petroleum Electronics Automobiles • E I DuPont De Nemours • Corning Glass Works • Kaiser Aluminium & Chemical Corporation • Reynolds Metals Company 29 .

Lack of Competitive Substitute • Excessive Faith in Mass production – resulting in declining unit cost • Pre-occupation with R&D 30 .Marketing Myopia : Reasons • Population Myth – assured growth due to expanding and affluent population • Idea of indispensability .

Marketing Myopia : Learning No growth industry : Possibility of continued growth Failure at the top – Senior management Need for Creative destruction Industry is customer satisfying process (needs) not goods producing process • Need for Customer Orientation • Visionary Leader with Clear Direction • Focus on Marketing ??? • • • • • 31 .

job shops • Un planned expansion of product lines and business lines • Sudden jump in marketing budgets and staff • Change in Organization structures without proper thinking • Unnecessary innovations. Steam shovels • Examples in Real life – Industry or company Marketing Myopia : Misinterpretations 32 .• Marketing Mania – responsive to fleeting whims of customers.

Case Study Method • Analysing Case Study ??? 33 .

Case Study Method • • • • • • • Methodologies of Teaching Case and Case Study Method Types of Cases Role of Students and Teacher Benefits Tools used Steps in Case Analysis 34 .

Steps in Case Analysis • • • • • • • • Back ground Situation Analysis Problem Identification Reasons for Problems Alternative courses of Action Evaluation of Alternatives Recommendations Contingency Plan 35 .

Marketing Planning Process • Levels in Organizations : 36 .

3. SBU. Analyzing Marketing opportunities Set Marketing Objectives Designing Marketing Strategies Developing Marketing Programs Managing Marketing Efforts Marketing Planning Process • Levels in Organizations : Corporate. 2.1. 4. 5. Division. Product 37 .

Marketing Mix • 4 P’s of a Product • 7 P’s for a Service • Class Exercise in Groups ??? 38 .

Marketing Mix • • • • • • • Environmental Variables (Uncontrollable) ??? Concept & Origin Definition & Significance (Controllable) Changes. combination and consistency 4 P’s to 4 C’s Unique features of Services and implications Extended 3P’s for Services – origin 39 .

Marketing Mix • Case Study on Marketing Mix ??? • Sub-components of 7 P’s 40 .

Product Price • • • • • • • • • Quality Variety Design Features Brand name Sizes Packaging Services Warranties • • • • • • List Price Price Validity Payment terms Discount structure Incentive schemes Credit period 41 .

Place Promotion • • • • • • Channels Coverage Location Assortments Inventory Transport • • • • • • • • Advertising Sales Promotions Publicity Events Experiences Public Relations Direct Marketing Personal selling 42 .

Standardized / customized • Number of steps .People Process • • • • • • • • Customers Employees Education Training Recruitment Motivation Rewards Teamwork • Flow of activities .Simple / complex • Degree of Customer involvement 43 .

Music 44 .Layout .Physical Evidence • Equipment • Signage • Facility design .Furniture • • • • Aesthetics Staff Uniform Business stationary Ambient conditions .Temperature .

Product. Geographic.Marketing Organization • Concept of Organization • Evolution of Marketing in various eras • Process of creating structures • Types – Functional. Matrix and Customer / Market based • Pros and Cons 45 .

national or international 4.Width of operations – regional. mktg or both 2.Marketing Organization Factors governing structure : 1.Marketing – by self or agents 3.Type of firm – mfg. of Product lines and nature of products 5.Extent of Competition and Customer Service 46 .No.

Unambiguous Job Specification Careful planning of Spans and Levels Relationship between Line and Staff Effective Co-ordination between various departments 47 . 4. 3.Fundamental Requirements 1. 2.

Inter departmental Relations Customer Driven organization : 1. 2. Need for harmony to pursue company objectives and think CUSTOMER. Explain ??? 48 . Customer focused Role of all departments.

Overlapping Roles & responsibility 4.Inter departmental Relations Conflicts – rivalries and distrust Reasons for conflicts : 1.Constraints of Resources 2.Dual control and authority 5.Differences of Opinion 3.Perceived inequalities 49 .

Outdoor Group Assignment Marketing Organization 1.Find out Organization structure and total manpower. 4.Find out structure of Marketing department and manpower strength. 50 . 6.Make Power point presentation and submit report in next class.Select 2 companies in given sector. 5.Visit the Company head office or branch. 2. 3.Find out designations and job profiles at various levels in Marketing department.

Buyer Behaviour Concept and Definition Types & Differences Based on Concepts Need to study Buyer characteristics Buyer’s Decision Process Buying Roles Diffusion of Innovation Categories of Adopters 51 .

groups and organizations select. ideas or experiences to satisfy their needs and wants Business Buying Define ??? 52 .Consumer Behaviour Study of how individuals. use and dispose of goods. buy. services.

Class Exercise Types Differences ??? 2 53 .

2 Based on Concepts 54 .

Based on Concepts Economics Psychology Sociology Anthropology Marketing 2 55 .

2 Need to study Consumer Behavior ??? 56 .

Need to study Consumer 2 Behavior Studying consumers provides clues for 1.Improving/introducing products & services 2.Crafting messages 5.Look for emerging trends and new opportunities To understand the buyer and to create a customer out of him 57 .Devising channels 4.Developing other marketing activities 6.Setting prices 3.

Buyer Behaviour C 4 P s E M n a o n s u m e r B u y e r rD o e c ce i ss si o n r k e t i n g B u y e r B u y e r v i r o n m C e h n a t r a c t e D r i e s ct i i c s s i o n P 58 .

Buyer characteristics Factors influencing Consumer Behaviour ??? 59 .

Buyer characteristics Factors influencing Consumer Behaviour • Cultural – broadest and deepest influence • Social • Personal • Psychological 60 .

Religion Multi-cultural marketing • Social Class – Urban & Rural Eg. McDonald’s 61 . Kellogg’s.Cultural factors • Culture – US / India • Sub – culture – North / South.

Nerolac. 62 . Provogue. Onida. Levi’s.Social factors • Reference Groups – opinion leaders • Family – Orientation/Procreation Joint / Nuclear family • Roles and Status – VP / Salesman Eg.

Belmonte 63 . Insurance.Personal Factors • Age & Family Life Cycle Vehicle. Reid & Taylor. Investment • Occupation & Economic Circumstancesworker/manager. clothes & shoes • Personality and self – concept • Lifestyle Eg.

Psychological Factors • Motivation – Maslow. Herzberg • Perception –(Aggressive Salesman) Selective Attention/Distortion/Retention Eg. Freud. Diet Coke / Pepsi • Learning – Experience & Practice eg. LG product range • Memory – Encoding & Retrieval 64 .

Factors influencing Consumer Behaviour • Class exercise in Groups 65 .

Buyer’s Decision Process • Steps 66 .

action. disposal 67 .Buyer’s Decision Process • • • • Problem (Need) Recognition Information Search Evaluation of Alternatives Purchase Decision – intervening factors. use. components • Post purchase behaviour Satisfaction.

Types of Consumer Buying Decisions 4 68 .

Types of Consumer Buying Decisions 4 Routine Routine Response Response Behaviour Behaviour Limited Limited Decision Decision Making Making Extensive Extensive Decision Decision Making Making Less Involvement More Involvement 69 .

Level of Consumer Involvement 70 .

Level of Involvement Previous Experience Previous Experience Interest Interest 4 Factors Factors Determining Determining Level of Level of Involvement Involvement Social Visibility Social Visibility Perceived Risk of Negative Perceived Risk of Negative Consequences Consequences Situation Situation 71 .

Buying Roles • Types • Significance 72 .

Buying Roles • • • • • Initiator Influencer Decider Buyer User 73 .

Diffusion of Innovation 8 Adopter Categories • Implications 74 .

5 Adopter Categories Everett Rogers – Diffusion of Innovation • Innovators • Early Adopters – opinion leaders • Early Majority • Late Majority • Laggards 8 75 .

5%) 3. Laggards – traditional (16%) 76 . Innovators – venturesome (2. Early adopters – opinion leaders (13.Adopter categorization 1.5%) 2. Early majority – deliberate (34%) • After average person: 1. Late majority – skeptical (34%) 2.

Cognitive Dissonance • Concept • Implications 8 77 .

Consumer Behaviour • Home Assignment 8 78 .

Marketing Environment • Macro ? • Micro ?? • Need to understand ??? 79 .

Marketing Plan • Concept and Definition • Need • Contents 80 .

Marketing Plan • • • • • • • • Executive summary & table of contents Current marketing situation Opportunity & issue analysis – SWOT Objectives – financial & marketing goals Marketing strategy Action programs Plan forecasts Controls 81 .

market share & profits 82 . competition.Marketing Plan • Executive summary & table of contents – presents a brief overview of the proposed plan • Current marketing situation – presents relevant background data on the market. distribution & macro-environment • Opportunity & issue analysis – SWOT • Objectives – defines the plan’s financial & marketing goals in terms of sales volume. product.

Marketing Plan • Marketing strategy – presents the broad marketing approach that will be used to achieve the plan’s objectives • Action programs – presents the special marketing programs designed to achieve the business objectives • Projected PL statement – forecasts the plan’s expected financial outcomes • Controls – plan monitoring 83 .

• • • • • Concept & Origin Components Benefits Corporate Social Responsibility Cause related Marketing Social Marketing 84 .

Targeting and Positioning • • • • Concept Definition Need Strategies 85 .Segmentation.

purchasing power etc.Accessible – can be effectively reached & served 4.Measurable .in terms of size. 2. • To be useful.Segmentation • Market segment is a group of customers sharing a similar set of wants.Substantial – large/profitable 3.Differentiable 5. a segment must be: 1.Actionable 86 .

Bases for Segmentation of Consumer Markets 87 .

Bases for Segmentation of Consumer Markets
• Geographic • Demographic • Psychographic • Behavioral

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Geographic
1. Nation 2. State 3. Region 4. City 5. Climate 6. Density (urban/rural)

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Demographic
1. 2. 3. 4. 5. 6. 7. Age/Family size/Life cycle Education Income Religion/Race/Generation Nationality/Social class Gender Occupation

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sports. authoritarian etc 91 . extrovert. Lifestyle – culture. Personality – introvert. Page 3 etc 2. outdoor.Psychographic 1. ambitious. compulsive.

aware Attitude toward product – positive. heavy Loyalty status – medium.Behavioral 1. regular Usage rate – light. 5. strong Readiness stage – unaware. 7. 4. 3. 6. special Benefits User status – non user. 2. Occasions – regular. indifferent 92 .

Business Market Segmentation • Bases 93 .

order size 5. specific application. power structure.Business Market Segmentation 1. user/nonuser/customer capability 3. Situational Factors – urgency. Purchasing Approaches – purchasing style. Personal Characteristics – loyalty etc 94 . Demographic – industry. location 2. Operating Variables – technology. company size. existing relationships 4.

Targeting • Need • Strategies 95 .

Targeting Strategies • Single segment concentration • Selective specialization • Product specialization • Market specialization • Full market coverage 96 .

Targeting • Single segment concentration – small car only • Selective specialization – FM channel targeting all age groups with different programs • Product specialization – one product selling to different segments (paint) • Market specialization – many needs of 1 group – selling only to schools • Full market coverage – Differentiated and NonD Dell and Coke 97 .

Positioning • Definition • Bases 98 .

Bases for Positioning • • • • • • Attributes Benefits Image Price Competitors Emotion 99 .

Competitors.PLC • Concept and definition • Reasons for PLC • Stages in PLC • Strategies Sales. Customers. Costs. 4 P’s 100 . Profits. Marketing Objectives.

New product development • • • • • Definition Need Types Innovator Vs Imitator – adv / dis-adv Stages ??? 101 .

Idea screening – is the product idea compatible with company objectives. Marketing strategy development – can we find a cost-effective. strategies & resources? 3. Idea generation – is the idea worth considering? 2. Concept development & testing – can we find a good concept for the product that consumers would try? 4.New product development 1. affordable marketing strategy? 102 .

Business analysis – will this product meet our profit goals? 6. Commercialization – are product sales meeting expectations? 103 . Market testing – have product sales met expectations? 8.New product development 5. Product development – have we developed a technically & commercially sound product? 7.

Profits. Modernization. Levels & Types Product Mix – dimensions Product Line and Item Packaging and Labeling Product Line Analysis – Sales. Featuring and Pruning 104 • . Line filling.Product • • • • • Meaning. Market Profile Product Line Strategies – Line stretching.

Price • • • • • • Meaning. Importance Setting. Adapting and Changing Price Stages in Setting Price Price Adaptation and Changing Pricing Methods and Strategies Non-Price Competition 105 .

L and SCM Functions of Marketing Channels Objectives Structure of Marketing Channels Consumer goods. Industrial goods and Services Wholesaling .Place • • • • • Meaning. Importance PD. Retailing and Franchising • 106 .

Promotion • • • • • Meaning Importance Promotional Mix 5 M’s of Advertising 107 .

Media and Measurement • 108 . Direct marketing and Personal Selling 5 M’s of Advertising Mission. Public Relations. Events and Experiences. Money. Message. Publicity. Sales Promotion.Promotion • Promotional Mix Advertising.

Marketing Models • • • • • • • BCG Matrix GE Matrix Ansoff Matrix Mckinsey 7-S Model Porter’s 5-forces Model Porter’s Generic strategies Perception Mapping 109 .

Marketing Terms • • • • • • Ambush Marketing Viral Marketing Green Marketing Turbo Marketing Online Marketing Mobile Marketing 110 .

Enjoy and celebrate Life ! Thank you 111 .All the best to you in your career.

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