MODULE 1:
AN INTRODUCTION TO MARKETING AND
ITS BASIC CONCEPTS
1. Meaning and Scope of Marketing,
2. Fundamental Marketing ...
Company’s orientation towards the
marketplace :
The various concepts used by
organizations can be classified as
follows :
...
 A special insight
In this context what needs to be understand is that the 4P’s have to
be added with two more Ps’.
6Ps’ ...
Marketing and customer value
Value ,is a sum total of tangible and
intangible perceived by the consumer
for the price that...
Marketing has to constantly create and deliver value to
the consumer.
The Customer delivered value is the difference betwe...
Value delivery process :
The delivery process has three stages ,
– First phase : choosing the value
This is the first phas...
Third phase: communicating the value
Utilise sales force, promotion, advertising, mass
communication
Nirmallya Kumar, has ...
The concept of Value Chain :
• Michael Porter’s value chain is a tool for
creating more customer value
According to this m...
• Primary activities :
bringing materials (inbound logistics) ,
converting them into final products (operations)
shipping ...
• All of these must be aligned to the core business
processes
• Today companies are partnering with suppliers and
distribu...
Holistic marketing framework
and customer value
Holistic marketing is about
Value exploration, Value creation, Value
deliv...
Who Markets?
A marketer is someone who has a product, service to offer /
sell.
He seeks response from the other party, a p...
Eight states of demand are possible :
1. Negative demand : Consumers dislike the product
and may even pay a price to avoid...
4. Declining demand : Consumers buy less frequently or not
at all.
5. Irregular demand: Consumer purchases vary on
occasio...
What are the tasks of Marketing
management
• Developing marketing strategies and plans
• Capturing marketing insights
• Co...
Apple unveils new tablet
computer, the iPad
28 January 2010,
 SAN FRANSISCO: Apple Inc CEO Steve Jobs took the wraps off ...
 iPhone-like anticipation
The iPad is Apple's biggest product launch since the iPhone three years ago, and arguably
rival...
Developing marketing strategies and plans
– Identify long and short term potentials
– Make strategic and tactical plans
• ...
 Strategy
 Originally, the word strategy has been derived
from Greek ‘Strategos’, which means
generalship. The word stra...
 Strategic planning refers to
management process in organizations
through which future impact of change
is determined and...
Connecting with the consumers
– Develop strong long term relationship with
customers
– Where , what , why they buy is to b...
Understand competition
• Shaping the market offerings
– Product quality , design, shape, price, maintenance,
after sales s...
Communicating value
– Develop and run marketing communications to
inform, persuade, remind consumers directly or
indirectl...
Marketing Plan
􀂙 What is a marketing plan ?
- A marketing plan is a written document that
summarizes what the marketer has...
Elements in a plan
- Mission statement – Why we are here and what
the company’s end aim of business is
- SWOT (Situation) ...
1. Mission Statement
- Mission statement – company’s end aim of business
- Mission statements reflect a vision
- Mission s...
2. SWOT Analysis
SWOT analysis is the strengths, weaknesses , opportunities
and threats analysis. It involves monitoring e...
Demographic
Economic
environment
Demographic
Economic
environment
Social / Cultural
environmentPolitical, legal
environmen...
3. Goal Formulation / Objective setting
After the SWOT, goals have to be set for the specified plan
period.
While setting ...
4. Strategy Formulation / Programme
Implementation
Goals indicate what the business wants to achieve,
strategy lays
down a...
Overall cost leadership means that in the industry , the firm will
achieve the best value engineering and thereby reduce c...
5. Budgets / Forecasts /P&L
Any plan has to be followed with a
detailed budgeting exercise , putting
down costs, money req...
Feedback and control becomes very
important to do course correction and
also redraft the plan if necessary.
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  1. 1. MODULE 1: AN INTRODUCTION TO MARKETING AND ITS BASIC CONCEPTS 1. Meaning and Scope of Marketing, 2. Fundamental Marketing Concepts, 3. Company orientations towards the Marketplace, 4. Marketing and customer value, 5. Strategic Planning, 6. Marketing plan, 7. Marketing in the Indian Economy, implications.
  2. 2. Company’s orientation towards the marketplace : The various concepts used by organizations can be classified as follows : • Production concept • Product concept • Selling concept • Marketing concept • Holistic marketing concept
  3. 3.  A special insight In this context what needs to be understand is that the 4P’s have to be added with two more Ps’. 6Ps’ make a holistic framework. 4P’s + 5th P (people) + 6th P (process). People will have to be oriented towards the market place and the processes will have to be constantly reviewed to ensure that every business action is in sync with the market philosophy. Only when this concept sinks into an organizational approach will Holistic Marketing have truly been assimilated.
  4. 4. Marketing and customer value Value ,is a sum total of tangible and intangible perceived by the consumer for the price that he pays. Marketers must first choose the value delivery process and communicate superior value by fine tuning the process
  5. 5. Marketing has to constantly create and deliver value to the consumer. The Customer delivered value is the difference between total customer value and total customer cost. The total customer value is the bundle of benefits customer expects from a given product or service. Total customer cost is the bundle of costs customers expect to incur in evaluating, obtaining, using and disposing of the product or service.
  6. 6. Value delivery process : The delivery process has three stages , – First phase : choosing the value This is the first phase of determining what should be the value offered to the consumer. • Homework before any product is marketed • Segment the market, select the target and develop the value positioning • STP – seg, targeting, positioning is the essence of marketing – Second phase: providing the value • Developing product, features, pricing, sourcing, making, distributing the product
  7. 7. Third phase: communicating the value Utilise sales force, promotion, advertising, mass communication Nirmallya Kumar, has proposed a 3 V approach to marketing 3V’s : Value segment Value proposition Value network • Value segments – customers ( his/her needs) • Value proposition – product / offering • Value network - channel / method of delivering the value
  8. 8. The concept of Value Chain : • Michael Porter’s value chain is a tool for creating more customer value According to this model, every business gets into nine value creating activities , out of which five are primary activities and four are support activities
  9. 9. • Primary activities : bringing materials (inbound logistics) , converting them into final products (operations) shipping out final products (outbound logistics) marketing (marketing and sales) servicing (service) • Support activities : procurement, HR, technology development and firm infrastructure. The firm constantly examines costs and performance in each of these value creating activity and looks for ways to improve the function. The firm analyses the competitors costs and benchmarks against which to perform. It also establishes ‘ best practices’ and makes them industry standards.
  10. 10. • All of these must be aligned to the core business processes • Today companies are partnering with suppliers and distributors to create a superior value network or a supply chain Core competencies Core Competencies refer to areas of special technical and production expertise, distinctive capabilities describes excellence in broader business process. Outsource others to reduce overheads and concentrate on the core
  11. 11. Holistic marketing framework and customer value Holistic marketing is about Value exploration, Value creation, Value delivery
  12. 12. Who Markets? A marketer is someone who has a product, service to offer / sell. He seeks response from the other party, a prospect, the one who receives the message and decides to act upon it. Marketers stimulate demand in the marketplace for their company’s products; demand management is an important function for any marketing department. Marketers seek to influence the level of demand, time of demand and composition of demand.
  13. 13. Eight states of demand are possible : 1. Negative demand : Consumers dislike the product and may even pay a price to avoid it. 2. Non Existent demand : Consumes may be unaware or uninterested in the product. 3. Latent demand : Consumers may share a strong need that cannot be satisfied by an existing product.
  14. 14. 4. Declining demand : Consumers buy less frequently or not at all. 5. Irregular demand: Consumer purchases vary on occasional basis, seasonal, weekly, monthly. 6. Full demand : Consumers are adequately purchasing expected levels of products 7. Overfull demand : More consumers want the product, but can’t be satisfied 8. Unwholesome demand: Consumers are attracted to products that have undesirable social consequences
  15. 15. What are the tasks of Marketing management • Developing marketing strategies and plans • Capturing marketing insights • Connecting with the consumers • Building strong brands • Shaping the market offerings • Delivering value • Communicating value • Creating long term growth
  16. 16. Apple unveils new tablet computer, the iPad 28 January 2010,  SAN FRANSISCO: Apple Inc CEO Steve Jobs took the wraps off the highly anticipated "iPad" tablet and pitched it at a surprisingly low price, aiming to bridge the gap between smartphones and laptops. Jobs, who returned to the helm last year after a much-scrutinized liver transplant, took the stage at a packed theater on Wednesday and showed off a sleek, half-inch thick tablet computer with a 9.7-inch touchscreen. "What once occupied half your living room can now be dropped in a bag," said NPD analyst Ned May. "It's pulling together a variety of needs (in) a universal entertainment device." The iPad will sell from late March for as low as $499 for 16 gigabytes of storage.  "Pricing is very aggressive, so it's pretty positive from a mass adoption perspective. It was about $200 lower than what I was expecting," said Brian Marshall, an analyst with Broadpoint Amtech. Other analysts had speculated that the tablet may cost as much as $1,000.  In an online poll before Wednesday's media event, 37 percent of more than 1,000 respondents said they would pay $500-$699 for the tablet.
  17. 17.  iPhone-like anticipation The iPad is Apple's biggest product launch since the iPhone three years ago, and arguably rivals the smartphone as the most anticipated in the company's history. Wednesday's event follows months of feverish speculation on the Web and on Wall Street. Shares of Apple rose to as high as $210.58 after the pricing news, up 5.5 percent from their session low. Apple announced a data plan with AT&T Inc, which appeared to have beaten out Verizon Wireless for the deal. Shares of AT&T, Apple's carrier partner on the iPhone, rose 1.14 percent while Verizon Communications Inc fell about 1 percent  Apple hopes to sell consumers on the value of tablets after other technology companies, including Microsoft Corp and Toshiba Corp, have failed in recent years.
  18. 18. Developing marketing strategies and plans – Identify long and short term potentials – Make strategic and tactical plans • Capturing marketing insights – Closely monitor marketing environment – Gather information both at micro and macro levels – Establish marketing information system, marketing research system, marketing implementation system, marketing control system
  19. 19.  Strategy  Originally, the word strategy has been derived from Greek ‘Strategos’, which means generalship. The word strategy, therefore, means the art of the general.  When the term strategy is used in military sense, it refers to action that can be taken in the light of action taken by opposite party.
  20. 20.  Strategic planning refers to management process in organizations through which future impact of change is determined and current decisions are taken to reach a designed future Strategic planning
  21. 21. Connecting with the consumers – Develop strong long term relationship with customers – Where , what , why they buy is to be understood – Segment the market and identify the targets in each group Building strong brands – Develop products with strong brand names – Establish these brands, monitor them and keep evaluating them
  22. 22. Understand competition • Shaping the market offerings – Product quality , design, shape, price, maintenance, after sales service, discounts, schemes, credit terms • Delivering value – Determine channels of distribution – Make it available within easy reach of the customers
  23. 23. Communicating value – Develop and run marketing communications to inform, persuade, remind consumers directly or indirectly about the brands they sell – Develop mass programmes, sales promotions, direct selling, public relations, interactive marketing and other activities • Creating long term growth – Initiate programmes to constantly monitor growth – Product relaunches, new product development ,evaluating marketing programmes should be constantly undertaken
  24. 24. Marketing Plan 􀂙 What is a marketing plan ? - A marketing plan is a written document that summarizes what the marketer has learned about the marketplace and indicates how the firm plans to reach its marketing objectives. - It is the act of putting together in a plan, the various elements of the marketing mix in a forecasted / futuristic approach �
  25. 25. Elements in a plan - Mission statement – Why we are here and what the company’s end aim of business is - SWOT (Situation) Analysis – Where are we - Objectives of the plan – where do we want to be - Strategy, programme – How do we reach there - Budgets, forecast, P&L – At what cost
  26. 26. 1. Mission Statement - Mission statement – company’s end aim of business - Mission statements reflect a vision - Mission statement should have three characteristics 􀂙 Focus on limited no. of goals 􀂙 Stress the major policies and values 􀂙 Define competitive sphere within which the company will operate
  27. 27. 2. SWOT Analysis SWOT analysis is the strengths, weaknesses , opportunities and threats analysis. It involves monitoring external and internal environment factors Opportunity and Threat are external factors, external environmental issues, having a bearing on our business. A major purpose of environmental scanning is to find new opportunities. Companies can use a Market Opportunity Analysis (MOA) to determine the attractiveness and probability of success:
  28. 28. Demographic Economic environment Demographic Economic environment Social / Cultural environmentPolitical, legal environment Technological, Physical environment Suppliers Public Marketing intermediaries Competitors Mktg. Info System Mktg.Plg. System Mktg. control system Mktg. Implem. System Target Consumer Product Place Promotion Price Factors influencing the strategy
  29. 29. 3. Goal Formulation / Objective setting After the SWOT, goals have to be set for the specified plan period. While setting goals, care should be taken to do the following: 1. They must be arranged hierarchically, from the most important to the least important. 2. Objectives should be stated quantitatively as far as possible. 3. Goals should be realistic 4. Objectives must be consistent.
  30. 30. 4. Strategy Formulation / Programme Implementation Goals indicate what the business wants to achieve, strategy lays down a long term approach path to reach there. Michael Porter , laid out three generic strategies that provide a starting point in building a strategy plan. 1. Overall cost leadership 2. Differentiation 3. Focus
  31. 31. Overall cost leadership means that in the industry , the firm will achieve the best value engineering and thereby reduce cost of production. Differentiation means achieving performance in an important customer benefit area valued by a large part of the market. The firm should be able to offer a superior differentiation compared to competition. Focus means that the business will focus on a narrow segment. They will achieve cost leadership or differentiation within the target segment. Yet another area of strategy formulation is the idea of strategic alliance with another partner. Strategic alliances can take the form of marketing alliances.
  32. 32. 5. Budgets / Forecasts /P&L Any plan has to be followed with a detailed budgeting exercise , putting down costs, money required for the project and the expected returns and variances expected. This should be done for the plan period and also for the next two or three years.
  33. 33. Feedback and control becomes very important to do course correction and also redraft the plan if necessary.

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