Company’s orientation towards the
marketplace :
The various concepts used by
organizations can be classified as
follows :
...
Production concept
• Holds the view that mass distributed inexpensive products
are required to expand the market
e.g. Chin...
Selling concept
• Holds the view that products should be aggressively sold /
promoted
• Hard sell is the method
• Used ext...
Holistic marketing concept
This concept is based on the development, design and
implementation of marketing programmes , p...
Relationship marketing is the process of building a mutually
healthy and beneficial relationship between the marketer and
...
A growing number of organizations are customizing offers,
services and messages to suit individual needs. These
companies ...
Integrated Marketing
The marketer has to devise the marketing programs to create,
communicate and deliver value to the con...
Product
 Product variety
 Quality
 Design
 Features
 Brand name
 Packaging
 Sizes
 Services
 Warranties
 Returns
Price
 List Price
 Discounts
 Allowances
 Payment period
 Credit terms
Promotion
 Sales promotion
 Advertising
 Sales force
 Public relations
 Direct marketing
Place
 Channels
 Coverage
 Assortments
 Locations
 Inventory
 Transport
From a sellers point of view, each of the component signifies a
tool to influence a buyer.
From a buyers view, each of thi...
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’ ma...
Two key themes of integrated marketing are:
1. Many marketing activities are strung together
to deliver value and customer...
Internal Marketing
Holistic marketing incorporates internal marketing, ensuring that
everyone in the organization embraces...
Social Responsibility Marketing
Holistic marketing tells us the importance of understanding
broader concerns and the ethic...
Fundamental Marketing Concepts
• Needs ,wants, demands
• Value , satisfaction
• Segmentation, Target markets, Positioning
...
Needs, Wants, Demands
Needs are basic human requirements.
Wants are directed to specific objects that satisfy a need.
Dema...
Value , Satisfaction
Value reflects the perceived tangible and intangible benefits and
costs to the customers.
Value is a ...
• Customer value
The Customer delivered value is the difference between
total customer value and total customer cost.
The ...
Now we shall go to the section of how marketing creates value
for the consumer.
Marketing has to constantly create and del...
Value delivery process :
The delivery process has three stages , as is explained below
– First phase : choosing the value
...
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 talks about three key
management questions on value.
Va...
􀂙 Value exploration
- Must integrate, cognitive space, competency of the
company and resource space of the organization
- ...
􀂙 Value Creation
- Marketers must identify the following:
- Customer benefits
- Utilise core competencies
- Manage busines...
􀂙 Value Delivery
- Customer relationship : constantly
understand customer needs
- Internal resource management : single
fa...
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...
Developing marketing strategies and plans
– Identify long and short term potentials
– Make strategic and tactical plans
• ...
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...
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Mm3,4

  1. 1. 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
  2. 2. Production concept • Holds the view that mass distributed inexpensive products are required to expand the market e.g. Chinese products, take advantage of inexpensive labour and low costs to dominate the market Product concept • Holds the view that products of good features and quality will attract the market itself • It might , but not on a long standing basis • Unless the distribution, pricing, advertisements are correct the concept will not work
  3. 3. Selling concept • Holds the view that products should be aggressively sold / promoted • Hard sell is the method • Used extensively by unsought goods – e.g. insurance, • Assumes that consumers will buy a product and eventually like it and will not complain even if there is a problem • Sell more, to make more money and more profit
  4. 4. Holistic marketing concept This concept is based on the development, design and implementation of marketing programmes , processes and activities that recognises their breadth and interdependencies. This concept assumes that everything matters in marketing. Four components of holistic marketing are : – Relationship – Integration – Internal – Social
  5. 5. Relationship marketing is the process of building a mutually healthy and beneficial relationship between the marketer and the prospect. Four key constituents for marketing are : customers, employees, marketing partners ( channel partners, suppliers, distributors, dealers) and members of the financial community(shareholders, investors, analysts). The outcome of this relationship is building of a strong marketing network. The operating principle of this network is that,“build the network and profits will follow”
  6. 6. A growing number of organizations are customizing offers, services and messages to suit individual needs. These companies collect information on each customers past transactions, demographics, psychographics , media and distribution preferences. They hope to capture a large share of each customer’s expenditures by building high customer loyalty and focusing on customer lifetime value. The ability of a company to deal with customers individually has become possible because of advances in factory customization, computers, internet, database marketing software.
  7. 7. Integrated Marketing The marketer has to devise the marketing programs to create, communicate and deliver value to the consumers. One traditional depiction of marketing is in terms of the marketing mix. It is a set of marketing tools that the firm uses to pursue its marketing objectives in the target market. McCarthy classified the mix into four broad groups, which he called the 4 P’s of Marketing: Product, Price, Promotion, Place.
  8. 8. Product  Product variety  Quality  Design  Features  Brand name  Packaging  Sizes  Services  Warranties  Returns
  9. 9. Price  List Price  Discounts  Allowances  Payment period  Credit terms
  10. 10. Promotion  Sales promotion  Advertising  Sales force  Public relations  Direct marketing
  11. 11. Place  Channels  Coverage  Assortments  Locations  Inventory  Transport
  12. 12. From a sellers point of view, each of the component signifies a tool to influence a buyer. From a buyers view, each of this connotes a customer value. Robert Lauterborn suggests that the seller’s 4 P’s correspond to 4 C’s as follows: Four P’s Four C’s Product Customer solution Price Customer cost Place Convenience Promotion Communication
  13. 13. 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.
  14. 14. Two key themes of integrated marketing are: 1. Many marketing activities are strung together to deliver value and customer satisfaction 2. All these activities are co-ordinated to get the maximum effect. An integrated marketing communications strategy involves choosing communications that reinforce and complement each other.
  15. 15. Internal Marketing Holistic marketing incorporates internal marketing, ensuring that everyone in the organization embraces appropriate marketing principles, especially senior management. Internal marketing should work at two levels : One, between the various marketing functions like sales, advertising, product management, marketing research must work together. All these functions must be co-ordinated from the customer’s point of view. Next, the various other departments like production, finance, R & D should also “think customer”. Marketing orientation must become pervasive throughout the company.
  16. 16. Social Responsibility Marketing Holistic marketing tells us the importance of understanding broader concerns and the ethical and social issues in the context of marketing actions. One should approach issues with ‘humanistic marketing’ and ‘ecological marketing’ Social marketing concept holds that the marketing company should deliver value to its target customer, in a way better than competition does, by protecting social and environmental needs and enhance social well being. Cause related marketing, i.e. building market relationships with a cause or causes for mutual benefit is what companies aspire for.
  17. 17. Fundamental Marketing Concepts • Needs ,wants, demands • Value , satisfaction • Segmentation, Target markets, Positioning • Offerings, brands • Marketing channels, Supply chain • Competition • Marketing Environment • Planning
  18. 18. Needs, Wants, Demands Needs are basic human requirements. Wants are directed to specific objects that satisfy a need. Demands are wants for specific products backed by ability to Pay.There are five types of needs : 1.Stated Needs (customer says he wants an inexpensive car) 2.Real Needs ( customer wants a car whose operating cost is low, not the initial price) 3.Unstated Needs (customer expects good service from dealer, does not ask for it) 4.Delight Needs(customer would like to get extra fittings at no cost) 5.Secret Need (customer wants to be seen a savvy consumer owning the car)
  19. 19. Value , Satisfaction Value reflects the perceived tangible and intangible benefits and costs to the customers. Value is a combination of quality, service and price (QSP) , called the ‘customer value triad’. Value increases with quality and decreases with price. Marketing constantly works on increasing and communicating value to the consumers. Satisfaction is the cumulative comparative judgements resulting from the product’s perceived performance or outcome in relation to his or her expectations. Satisfaction is directly proportional to expectations and exceeds and decreases with it.
  20. 20. • Customer value 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.
  21. 21. Now we shall go to the section of how marketing creates value for the consumer. Marketing has to constantly create and deliver value to the consumer. Value , we saw in the previous chapter as , 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
  22. 22. Value delivery process : The delivery process has three stages , as is explained below – 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
  23. 23. 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
  24. 24. 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
  25. 25. • 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.
  26. 26. • 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 The need for developing Core competencies • Core business processes need resources – labour, power, materials, machines, information • Nurture resources to gain better competencies • Outsource others to reduce overheads and concentrate on the core
  27. 27. Holistic marketing framework and customer value Holistic marketing talks about three key management questions on value. Value exploration, Value creation, Value delivery Let us examine each in detail.
  28. 28. 􀂙 Value exploration - Must integrate, cognitive space, competency of the company and resource space of the organization - Cognitive space : includes existing and latent needs - Competency space : understanding scope of business and physical and knowledge competencies - Resource space : partners who can collaborate with them
  29. 29. 􀂙 Value Creation - Marketers must identify the following: - Customer benefits - Utilise core competencies - Manage business partners - To realign core competencies : - Define the business concept - Reshape the scope of business - Position (re) the company’s identity in people’s minds
  30. 30. 􀂙 Value Delivery - Customer relationship : constantly understand customer needs - Internal resource management : single family of software to link all business processes - Business partnership allows to manage complex business relationships
  31. 31. 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.
  32. 32. 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.
  33. 33. 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
  34. 34. 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
  35. 35. 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
  36. 36. 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
  37. 37. 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
  38. 38. 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

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