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Lecture 1 define marketing for the 21st century


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  • 1. MarketingManagement Lecture One Zaved Mannan MBA (Australia) University of Liberty Arts Bangladesh
  • 2. Who Am I?Name: Zaved MannanCEO, 5M CorporationEx-employee of Bank of WesternAustralia, Commonwealth Bank ofAustralia, Citibank, N.A., Hutchison3G Australia, Vodafone Australia,Asian University of Bangladesh Zaved Mannan, MBA (Australia) 2
  • 3. Who Am I?MBA from Charles Sturt University, AustraliaGD in Business Information System fromWollongwong University, Australia Honors and Masters of Economics, DhakauniversityAuthor of ‘Introduction to Economics’, AsianUniversity of BangladeshCo-author of two articles on Lean Production,published by Lambart Academic Publishing,Germany. Zaved Mannan, MBA (Australia) 3
  • 4. Course objectivesThe objective of this subject is to give you a sound appreciation of themarketing discipline and how effective marketing can be used to help organizations compete effectively. Zaved Mannan, MBA (Australia) 4
  • 5. Academic enquiries 01941410850I am available to answer your queries most times between the hours of 9 am to 9 pm. Zaved Mannan, MBA (Australia) 5
  • 6. Prescribed text(s) Kotler et al., (2009), MarketingManagement: A South Asian Perspective,13th Ed., Pearson, Delhi. ISBN 978-81-317-1683-0 Zaved Mannan, MBA (Australia) 6
  • 7. Required readingLecture notesJournal ArticlesOnline resourcesNewspapers andBusiness journals Zaved Mannan, MBA (Australia) 7
  • 8. Assignment Students will be advised aboutassignment and presentation topic and outline in week 1. Zaved Mannan, MBA (Australia) 8
  • 9. Define Marketing Marketing is everywhere … Zaved Mannan, MBA (Australia) 9
  • 10. Lecture 1 ObjectivesAt the completion of this lecture, youshould be able to: Understand the nature of marketing, and the marketing concept Recognize marketing’s applications beyond physical goods – including to services, ideas, and experiences; Identify the basic tasks performed by marketing managers; Distinguish the differences between the various orientations to the marketplace and Appreciate and the role of marketing in today’s business environment. Zaved Mannan, MBA (Australia) 10
  • 11. Marketing is everywhere… Zaved Mannan, MBA (Australia) 11
  • 12. Introductory Exercises One of your friends is contemplating opening a coffee shop near yourUniversity campus. What strategies can you share with your friend to assist in launching the business? Zaved Mannan, MBA (Australia) 12
  • 13. What is marketing?“Marketing is an organizational function and a set of processes for creating,communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.” (Kotler et al., 2009, p.6) Zaved Mannan, MBA (Australia) 13
  • 14. ExampleREAD the example of two Indian girls in page 3 (Kotler, 2009). Marketing is everywhere. Good marketing is not accident, but a result of careful planning and execution. Zaved Mannan, MBA (Australia) 14
  • 15. The Importance of marketingFinancial success often depends onmarketing ability.Marketers create demand for product.Many companies have Chief MarketingOfficer (CMO) position.Both ‘sustained and steady line growth’and ‘customer loyalty/retention’ heavilydepend on marketing. Zaved Mannan, MBA (Australia) 15
  • 16. The Importance of marketingMarketing builds brands and a loyalcustomer base, intangible assets.Big companies, such as, Levis, GeneralMotors, Kodak, Sony etc. all haveconfronted newly empowered customersand competitors.CEO of GE warned his company “Changeor Die.” Zaved Mannan, MBA (Australia) 16
  • 17. Nirma Washing PowderREAD the example of Nirma WashingPowder (Kotler et al. P. 5) . Betterproducts. Better value. Better Living.Nirma’s TV advertisement, withmemorable jignle “Doodh ki safediNirma se aaye, rangeen kapde bhi khilkhil jaaye, sabki pasand Nirma.” hashelped the brand become one of themost powerful brands in the country. Zaved Mannan, MBA (Australia) 17
  • 18. The Scope of MarketingMany people are surprised when they hearthat selling is not the most important part ofmarketing.The aim of marketing is to make sellingsuperfluous.The aim of marketing is to know andunderstand the customer so well that theproduct or service fits him and sells itself. Zaved Mannan, MBA (Australia) 18
  • 19. The Scope of MarketingMarketing should result in a customerwho is ready to buy.When Apple launched its iPhone, itwas swamped with orders becauseApple had designed the ‘right’product. Zaved Mannan, MBA (Australia) 19
  • 20. Tata AceREAD the example of Tata Ace in page 6 (Kotler, 2009). This example describes how Tata Motors introduced a one ton truck based on customer needs. Zaved Mannan, MBA (Australia) 20
  • 21. What is marketed?Goods, services, events, experiences, persons, places, properties, organizations, information and ideas. Zaved Mannan, MBA (Australia) 21
  • 22. Who Markets? Marketers are responsible for demandmanagement. Mangers seek to influence thelevel, timing, and compositions of demand to meet the organization’s objectives. Zaved Mannan, MBA (Australia) 22
  • 23. Who Markets?Eight demand states are possible: Negative Demand: Customers dislike the product and even pay a price to avoid it. Non-existent Demand: customers may be unaware of or uninterested in the product. Latent Demand: Customers may share a strong need that can not be satisfied by an existing product. Declining Demand: consumers begin to buy the product less frequently or not at all. Zaved Mannan, MBA (Australia) 23
  • 24. Who Markets?Irregular Demand: Consumers purchases vary ona seasonal, monthly, weekly, daily or even hourlybasis.Full Demand: consumers are adequately buying allproducts put into the marketplace.Overfull Demand: More consumers would like tobuy the product than can be satisfied.Unwholesome Demand: Consumers may beattracted to products that have undesirable socialconsequences. Zaved Mannan, MBA (Australia) 24
  • 25. Who Markets? After identifying the demand state,marketers determine a plan of action to shift the demand to a more desired state. Zaved Mannan, MBA (Australia) 25
  • 26. Markets ‘Market’ is a collection of buyers and sellers whotransact over a particular product or product class. Five basic markets: Resource, consumer,intermediary, manufacturer and government market. Figure 1.1 (page 10) describes five basic marketsand their connecting flows. Marketers often use the term ‘markets’ to covervarious groupings of customers. Zaved Mannan, MBA (Australia) 26
  • 27. MarketsThey view sellers as ‘Industry’ and buyersas ‘market’. Example: need markets (thediet-seeking market), product market (shoemarket), demographic markets (the youthmarket), geographic market (the Frenchmarket), etc.Figure 1.2 (Page 10) show the relationshipbetween the industry and the market. Zaved Mannan, MBA (Australia) 27
  • 28. Key Consumer MarketConsumer Market: selling consumer goods andservices. Example: soft drinks, cosmetics, shoes,etc. Companies spend a try to establish a superiorbrand image.Business Markets: Companies face well-trainedand well-informed professional buyers who areskilled at evaluating competitive offerings.Business marketers must demonstrate how theirproducts will help these buyers achieve higherrevenue or lower costs. Zaved Mannan, MBA (Australia) 28
  • 29. Key Consumer MarketGlobal Markets: Companies face additionaldecisions and challenges when they sell product inthe global marketplace. Which countries to enter,how to enter, how to adapt product in eachcountry, how to price, what kind of communicationto fit different cultures, etc.Government and Non-profit Markets: Thesebuyers have limited purchasing power. Lowerselling prices affect the features and quality ofproducts. Government purchasing calls for BIDs. Zaved Mannan, MBA (Australia) 29
  • 30. Marketplaces and Market-spacesThe market place is physical, such as shoe store and market space is digital, as when you buy shoe online. Zaved Mannan, MBA (Australia) 30
  • 31. Meta-MarketsA cluster of complementary products that are closely related in the minds of consumers, but spread across a diverse and industries. The automobile meta market consists of car manufacturers, new car and used car dealers, bank, insurance companies, mechanics, spare parts dealers, serviceshops, auto magazines, classified auto ads in newspapers, and auto car websites. Zaved Mannan, MBA (Australia) 31
  • 32. Tasks for the MarketerFive key functions of the CMO: Strengthening the brand Measuring marketing effectiveness Driving new product development based on customer needs. Gathering meaningful customer insights. Utilizing new marketing technologies. Zaved Mannan, MBA (Australia) 32
  • 33. Core Marketing Concepts Zaved Mannan, MBA (Australia) 33
  • 34. Exercise Assume you are about to graduate. How would you apply marketing principles to your job search? In what ways would you be able to create, communicate, and deliver value as a potential employee, and what wouldthat value be, exactly? How would you prove that you can deliver that value? Zaved Mannan, MBA (Australia) 34
  • 35. Needs, Wants and Demands People have need for air, food, water, clothing and shelter to survive. Apart from that people have a strong need for recreation, education and entertainment. A need become wants when they are directed to specific objects that might satisfy the need. A person in Australia needs food but may want a hamburger, French fires and a soft drink. But a person in Bangladesh needs food buy may want rooti, rice, biriyani, borhani or soft drink. Zaved Mannan, MBA (Australia) 35
  • 36. Needs, Wants and DemandsDemands are wants for specificproducts backed by an ability to pay.Many people want a BMW, only feware willing and able to buy a BMW.Companies are concern aboutdemand not want. Why? Zaved Mannan, MBA (Australia) 36
  • 37. Needs, Wants and DemandsCriticism about: ‘Marketers create needs’ or ‘Marketers get people to buy things they don’t want,’ Which one is true?Example: Marketers might promote the idea that aBMW would satisfy a person’s need for social status.They do not create the need for social status. Zaved Mannan, MBA (Australia) 37
  • 38. Needs, Wants and DemandsFive types of needs: Stated needs: The customer wants an inexpensive car. Real needs: The customer wants a car whose operating cost is low. Unstated needs: The customer expects good service from the dealer. Zaved Mannan, MBA (Australia) 38
  • 39. Needs, Wants and DemandsDelight needs: The customer wouldlike the dealer to include an on-boardnavigation system.Secret needs: The customer wantsfriends to see him as a savvyconsumer. Zaved Mannan, MBA (Australia) 39
  • 40. Target Markets, Positioning, and Segmentation Marketers first identify marketsegments by examining demographic, psychographic and behavioral differences among buyers. Not everyone like the same product. Zaved Mannan, MBA (Australia) 40
  • 41. Target Markets, Positioning, and Segmentation After segmenting the market,marketer decide which segment represent greater opportunity. Marketer may have several target market for a specific product. Zaved Mannan, MBA (Australia) 41
  • 42. Target Markets, Positioning, and SegmentationFor each target market, marketer develops market offering that it positions in the minds of targetmarket. Example: Volvo positions its car as the safest car. Zaved Mannan, MBA (Australia) 42
  • 43. Grameen BankREAD the example of Grameen Bank in page 15. This example explains how to target markets and position the product in the market. They targetedpoor women for their micro finance product. These poor women are not able to borrow money from commercial banks as they can’t offer collateral securities to the banks. Therefore, they positioned ‘micro credit ‘ is for poor people. Zaved Mannan, MBA (Australia) 43
  • 44. BrandsAn offering can be a combination ofproducts, services, information andexperiences.A brand is an offering from a knownsource. When we think about KFC,we think fried chicken drumsticks,fun, children, fast food, convenience,superior customer service, uniquestore decoration, etc. Zaved Mannan, MBA (Australia) 44
  • 45. Value and SatisfactionValue is primarily a combination of quality,services, and price (qsp), called the‘Customer value triad’. Value increasesquality and service and decreases withprice.Satisfaction reflects buyer’s judgment of aproduct’s performance (or outcome) inrelationship to expectations. If satisfactionmatches with expectations, the customer issatisfied. Zaved Mannan, MBA (Australia) 45
  • 46. Marketing ChannelsMarketers reach target market throughthree type of channels: Communication channel, Example: TV, Radio,newspaper, magazine, billboards, posters, fliers,CDs, audiotapes, the internet, etc. Distribution channel; Example: distributors,wholesalers, retailers and agents. Service channel; Example: warehouse,transportation companies, banks, insurancecompanies, etc. Zaved Mannan, MBA (Australia) 46
  • 47. CompetitionCompetition includes all the actual and potential rival offerings (ex: tea) andsubstitutes (ex: Coffee) a buyer might consider. Read the example of steel companies in India in page 17. Zaved Mannan, MBA (Australia) 47
  • 48. Marketing EnvironmentTwo types of environments: Task environment: includes suppliers (material and service), distributors, dealers, target customers. Broad environment: Includes six components, such as, demographic, economic, physical, technological, political-legal, and cultural environment. Marketers must pay close attention to the trends and developments in these environments and make timely adjustment to their marketing strategies. Zaved Mannan, MBA (Australia) 48
  • 49. New Consumer CapabilitiesIncreased buying power: Today’s buyers are moreinformed. They are clicked away from comparingcompetitor prices and product attributes on theinternet.A greater variety of available goods and services:Ex. Amazon.comA great amount of information about practicallyanything: newspaper in any language, onlineencyclopaedias, dictionaries, medical information,movie ratings, consumer reports, etc. Zaved Mannan, MBA (Australia) 49
  • 50. New Consumer CapabilitiesGreater ease in interacting andplacing and receiving orders: you canorder from your home, office ormobile phone anytime.An ability to compare products: Socialnetworks,,,,,, etc. tomake informed choice. Zaved Mannan, MBA (Australia) 50
  • 51. New Company CapabilitiesInternet can be used as powerfulinformation and sales channel, informingcustomers about products worldwide.Researcher can collect richer informationabout markets, customers and competitors.Can conduct research.Internal communication through intranet foremployees. Zaved Mannan, MBA (Australia) 51
  • 52. New Company CapabilitiesTarget marketing are much easier through special-interest magazines, TV channels, newsgroups,etc.Extranets linking suppliers and distributors letcompanies send and receive information, placeorders and make payment efficiently.Marketers can send ads, coupons, samples tocustomers. They can also create customer profilebased on the information provided by customers. Zaved Mannan, MBA (Australia) 52
  • 53. New Company CapabilitiesMarketer can reach customer through mobilemarketing anytime.Firms can produce individually differentiatedproducts. Example: Customers can buy M&Mcandies with their names on them. BMW or Fordallows buyers to design their own models.Firms can also recruit new employees online andprovide intranet trainings. Zaved Mannan, MBA (Australia) 53
  • 54. The Marketing ConceptEmerged in the mid-1950s.The concept is not to find the right customers foryour products, but to find the right products foryour customers.Dell provides a platform where each customer cancustomizes their PCs.According to this concept, companies should bemore effective than its competitors in creating,delivering and communicating superior customervalue to the target market. Zaved Mannan, MBA (Australia) 54
  • 55. The Holistic Marketing Concept The concept is based on the development, design, and implementation of marketing programs, processes, and activities. The concept recognizes that ‘everything matters’ in marketing. A broad integrated perspective is often necessary. Figure 1.4 (page 22) provides an overview of four components of holistic marketing: Relationship marketing, integrated marketing, internal marketing and performance marketing. Zaved Mannan, MBA (Australia) 55
  • 56. The Holistic Marketing Concept Zaved Mannan, MBA (Australia) 56
  • 57. References Kotler, P., Keller, K. L., Koshy, A. & Jha, M.(2009). Marketing Mangement: A SouthAsian Perspective (13th ed.). PearsonEducation, Delhi. Whitwell, G., Lukas, B. A., & Doyle, P.(2003). Marketing Management: A StrategicValue-based Approach. John Wiley & Sons,Brisbane. Zaved Mannan, MBA (Australia) 57
  • 58. Questions? Zaved Mannan, MBA (Australia) 58