Marketing

Marketing
An Introduction
11/28/2014
PRAJEESH E MENON
MBA, KVM COLLEGE,Cherathala, Kerala

Evolution of Marketing
Evolution of Commerce and Industry
Household Economy
Barter Economy
Village Economy
Rise of Entrepreneurs
Industrial Revolution – late 18th and early 19th
century.
 Emerged in the early 1900s.
 Different orientations.
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PRAJEESH E MENON MBA, KVM
COLLEGE,Cherathala, Kerala

Co creation – Tanishq, Coke,.. / real time interaction
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Production Oriented
Sales Oriented
Marketing Oriented
Upto1930s
1950s
Till date
Mass production; Supply
exceeds Demand.
‘Customer will not buy’ if
there is no hard selling.
Emphasis on Product,
Distribution and Sales
Promotion.
Cold calling,
Mass production; Demand
exceeds Supply.
‘Supply creates its own
demand’.
Emphasis on product
(standardization) and
Distribution
Automobile, Film, Radio
(1st broadcasting medium
for entertainment and
advtsng) and Chemical
Industries flourished.
Customized Production.
Determination of customer
needs.
Emphasis on proper
marketing mix strategy.
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Essex race cars on display in Salt Lake
City, U S (1920)
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The concept of Marketing…
• Aim of Marketing: Is to know and understand the customers so
well that the product or service fits him and sells itself.
• American Marketing Association
Marketing is an organizational function and a set of process
for creating, communicating, and delivering value to
customers and for managing customer relationships in ways
that benefit the organization and its stake holders.
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• Philip Kotler defines marketing as a
“social process by which individuals and groups obtain what they
need and want through creating, offering and freely exchanging
products and services of value with others”.
– Two parties must be present; the buyer / customer and the seller/
marketer
– Both must have something viewed valuable by each other
– They must have the freedom to either accept or reject the offer
– Each of the parties feel desirable to deal with each other
– Each party is capable of communication and delivery
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Art
Philosophy
Marketing
Science
Business
Function
Practice
System
Relationship
Process
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Core Marketing Concept
Marketing offers
(products, services and
Experience)
Value and
Satisfaction
Needs,
wants and
demands
Exchange, transaction
and
Relationship
Markets
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• Need: Essentials of life (food, shelter, clothing) – primary
necessities
• Wants: Desires or wishes that are created – secondary in
nature
• Demands : Ability backed by desire to purchase the product
• Product: Anything that satisfies the needs and wants of the
customer
• Services: intangible in nature, different from product
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• Value: what is being delivered to the customer (brand value)
• Satisfaction: increases when the gap between expectation and
delivery decreases
• Exchange: money / money’s worth in return for a product
• Relationship: build and maintain a relation with the target
audience – 2 adv; customer retention (satisfaction), cost element
• Utility: absolute concept- usefulness of the product
• Markets: The set of actual and potential buyers of product and
service.
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Markets
• Consumer Markets
• Business Markets
• Global Markets
• Non profit and Govt. Markets.
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Marketing Offers
• Goods
• Services
• Events
• Experiences
• Persons
• Places
• Properties
• Organizations
• Information
• Ideas
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Offer for a service
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A product
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Selling an idea.
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Concepts in Marketing
Production Concept
Product Concept
Selling Concept
Marketing Concept
Holistic Marketing Concept.
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Production
Concept
Product
Concept
Selling Concept Marketing
concept
Consumers will
prefer products
widely available
and inexpensive.
Management
becomes cost
focused
Objective is cost
reduction
High production
efficiency, low
costs, mass
distribution.
Eg; China
Favor products
that will give high
quality,
performance,
innovative
features.
Concentrates on
producing superior
prdts and
improving them.
Consumers if left
alone will not buy
organisation’s
prdts.
Product or
service is not made
according to
customer’s
requirements
Aggressively
practiced in
unsought goods.
Aim ‘ sell what
they make and not
make what the
market wants.
All activities are
focused upon
providing customer
satisfaction.
Right products
for your customers
and not the other
way.
Organisational
goal is creating,
communicating,
delivering superior
customer value to
consumers.
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Selling Vs Marketing
Selling starts with seller .
All the activities will start with the
existing product.
Emphasizes on the saleable surplus
available within the corporation.
Seeks to quickly convert products to
cash.
Views business as a “goods
producing processes”
Marketing starts with the buyer.
All the activities will follow the
buyer and his needs.
Emphasizes on Identification of a
market opportunity.
Seeks to convert customer ‘needs’
to ‘products’.
Customer satisfying process.
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Selling Vs Marketing
Marketing mix is dominated with
the sellers preference.
Makes the product first and then
figures out how to sell it and earn
profit.
Emphasis on the existing
technology and reducing cost.
Cost determines the price.
‘Selling’ views the customer as the
last link in the business.
Buyer determines the marketing
mix.
The product offered is determined
by the customer.
Better technology thus better value
products for the customers.
Consumer determines price and
price determines cost.
‘Marketing’ views the customer as
the very purpose of the business.
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MARKETING MYOPIA
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WHAT IS MARKETING MYOPIA?
• Myopia literally means short sightedness.
• Marketing myopia is the inefficiency of the top
management to broadly define its business and meet
customer needs resulting to the decline of the product.
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Contd…
• Concept by Theodore Levitt in Harvard Business
Review in 1960.
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CONTD..
• Short sighted and inward looking approach to
marketing that focuses on the needs of the firm
instead of defining the firm and its products in terms
of the customer’s need and wants.
• In short, marketing myopia means, “focusing
products rather than customers”.
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MYTHS IN MARKETING MYOPIA
• Population myth.
• Production myth.
• Dangers in R&D.
• Threat from substitutes.
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AFFECTED INDUSTRIES…
• Banking
• Automobile
• Entertainment
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POPULATION MYTH
• In the population myth, it is believed that profits are
assured by an expanding and more affluent
population.
• The market also starts expanding and more and more
people started buying the product.
• This myth contributed largely to the failure of many
products.
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FAILURE OF
IN FOCUSING CUSTOMER SERVICE
• SBI is the largest state owned bank.
• It has more than 16000 branches in India and 130
branches overseas.
• It provides the range of banking products through its
vast network of branches in India and overseas.
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Contd…
• But , managing huge population became a serious
threat for SBI.
• Lack of focus on customer service and delay in
incorporating computerization worsened the situation.
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SBI SERVICES
• Computerization.
• Online banking.
• ATMs.
• Retail banking.
• Commercial banking.
• Life Insurance.
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PRODUCTION MYTH
• Concentration of companies only on production or
product.
• Belief that companies can protect themselves and
ensure growth through mass production.
• Emphasis only on mass production and economics of
scale.
• More product oriented, rather than customer oriented.
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AMBASSADOR STRUGGLE FOR SURVIVAL
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OVERVIEW
• HM an Indian automobile manufacturer is a part of
Birla Group of industries.
• The company was the largest car manufacturer in
India before the rise of Maruti Udyog Ltd(MUL).
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Contd..
• Ambassador Launched in 1958 was known as the first
Indian car, owes its design and technology to British
car model Morris Oxford built by Morris Motor
Company at Oxford, UK.
• Ambassador quickly occupied and ruled Indian
Markets from 1958-1980
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AMBASSADOR-SUCCESS STORY.
• Ambassador was widely used as a taxicab and as a
government limousine.
• It was the only car with Diesel option.
• A sturdy car, ideal for Indian Markets.
• Perception of being less expensive to maintain.
• Large spaced.
• Over 16% of brand sales came from the Indian
11/28G/201o4vernment.

REASONS FOR THE BRAND FAILURE.
• HM never knew whether they fit in the existing
economy
• Ambassador never changed with times. It focused on
only one segment till 1997 and within that time MUL
was able to bring out brands for each segments within
the nation.
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Contd..
• HM didn’t try to make some changes and upgrades
but overall the look and built-in quality remained the
same.
• Ambassador sales dipped badly in the year 2000 but
HM never bothered to rationalized the price of the
brand. Even today it costs over Rs. 4,00,000.
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Contd..
• Indica took away the taxi car market and the
customers got a new option for Diesel car with
modern technology.
• Immense competition from other major dealers like
MUL, Hyundai etc.
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Contd..
• In 2002, Mr. A. B. Vajpai replaced Ambassador with a
BMW Limo, from then on it lost the position of being
the first politicians’ choice.
• The car lacked the quality and refinement. Rattling
sound and rustling were some of the common
complaints.
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AMBIEROD
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FEATURES
• Remodeled by ace car designer Dilip Chabria.
• Price- Rs.4crore.
• Maximum speed-309 kms per hour.
• Focuses mainly on Indian youth.
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DANGERS IN R&D
• Companies focused only on the theme that technical
research and development will ensure the growth of
the company.
• But, lack of experimentation, improvement and
manufacturing cost reduction created inefficiencies
and ultimately fails the product.
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FAILURE OF MARUTI GYPSY
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OVERVIEW
• Maruti Gypsy was a major player in the car market.
• It was one of India’s first sport utility vehicles with
the tagline of, “There is a Gypsy in everyone”.
• But, Gypsy did not changed itself in tune with the
changing industry requirements.
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Contd…
• Even the company enhanced the power from
975 cc to 1300 cc only after 11 years.
• Thus, the product was failed in the market.
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NEW MARUTI GYPSY
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FEATURES
• Big tires for jeeps.
• 1300 cc engine.
• New youth look.
• Projected as a sports vehicle.
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SHADOW OF OBSOLESCENCE
• Threat from substitutes.
• Many products and services failed because of:
– Lack of upgradation
– Under estimation of market scenario
– Threats from substitutes or competitors.
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Contd…
• In essence, the companies believed that there are no
substitutes for its products or services.
• But, this underestimation lead to the failure of the
product
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FAILURE OF DOORADARSHAN
TV NETWORK.
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OVERVIEW
• Dooradarshan was the only option available to Indian
viewers in 1980s.
• It was running successfully with huge hits like
Ramayana, Sreekrishna, Shaktimaan, Jai-Hanuman,
Chhaya-geet, Malgudi days etc.
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Contd…
• But this TV network failed because of reasons
like:
– Incapabilities in catching up with latest technologies
and trends.
– Changing customer tastes.
– Tough competition from satellite channels.
– Not yet digitalized.
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CAUSES OF MARKETING MYOPIA
• Narrow minded approach to marketing situation
where only short ranged goals are considered.
• Product oriented rather than customer oriented.
• Stepchild treatment to marketing.
-Selling focuses on needs of the seller,
-marketing on the needs of the
buyer.
1•1/28E/20x14cessive focus on Research and Development.

IMPACTS OF MARKETING MYOPIA
• Short sightedness affects the mission in vision of the
company.
• Growth gets checked.
• Uncertain future.
• May lead to the death of the product.
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POSSIBLE LEARNINGS.
• A brand exists in the market till it becomes dated,
after that it is virtually impossible to rejuvenate the
brand.
• Brand must go to the customers for new ideas.
• Rationalize the price in the light of emerging market.
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Contd…
• Changes in the product along with the change in
market can sustain the brand even in emerging
market.
• Best example is Maruti 800, the brand is still
surviving because it made changes along with
changing customer values and demands.
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HOW TO PREVENT MARKET MYOPIA..?
• Customer Orientation
Focus on customer rather than on product.
• Focus on Marketing
• Looking for future opportunities.
• Retention of existing customers.
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CONCLUSION
Focusing on the customer’s satisfaction and
needs, the industry has to re-innovate its
mission, vision and goals.
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The Holistic Marketing Concept
Integrating the value exploration, value creation and value delivery activities with
the purpose of building long- term, mutually satisfying relationships and co-prosperity
among the key shareholders.
Holistic Marketing
Relationship Marketing
Internal Marketing
Socially Responsible Marketing
Integrated Marketing
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Internal Marketing
Ensures all the departments in the organization hold the marketing
principles.
Internal Marketing more important that outside marketing.
Co-ordination of all the departments.
Other departments must also “think customer”.
Integrated Marketing
All aspects of communication mix works unified. (Advertising, Personal
selling ,Sales promotion, Public Relations, Direct Marketing)
Marketing mix decisions, made for influencing the trade channels and final
consumers.
Many different marketing activities are employed to communicate and
deliver value.
Design and implementation of any one marketing activity is done with all
other activities in mind.
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Socially Responsible Marketing
Concerns about the ethical, environmental, legal, and social context of
marketing activities and programs.
Marketer should be concerned about the role playing and could play in terms of
social welfare.
Companies try to attain a long term interests of consumers and society.
Relationship Marketing
Aim in building long-term relationships with customers, employees, and other
marketing partners (suppliers, distributors) and the members of the financial
community ( shareholders, investors).
Core is CRM and PRM ( Partner ).
Used relatively high value products.
 The companies collect info. On each customer’s past transactions,
demographic, psychographics, and media and distribution preferences.
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Scope and Functions of Marketing
A. Functions of Research
B. Functions of Exchange
C. Functions of
Physical Treatment
D. Functions of
Facilitating
Exchange
1.Marketing Research
2.Product Planning
and
Development. 1.Buying and Assembling.
2.Selling
1.Standardisation, Grading
and Branding.
2.Packaging
3.Storage
4.Transportation.
1.Salesmanship
2.Advertising
3.Pricing
4.Financing
5.Insurance.
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A. Functions of Research
1.Marketing Research
Marketing research helps in analyzing the buyer’s habits, relative popularity of
the Product ,effectiveness of advertisement media, etc.
Provide the marketing managers with the timely and accurate information.
2.Product Planning and Development
A product is something which is offered by a business firm to customers to
satisfy their needs.
It is important to plan and develop product which meet the specification of the
customers.
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B. Functions of Exchange
1.Buying and Assembling
The information regarding the needs and tastes of the consumer.
A proper co-ordination between the marketing department and
purchasing department is needed.
Assembling means collection of goods already purchased from different
sources at a common point.
2. Selling
Ownership of good s is transferred from the seller to the buyer.
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C. Functions of Physical Treatment.
1.Standardization,Grading and Branding
 Standardization-Setting up of specifications of the product.
Grading- Higher price for higher grades of products. Eg: Agricultural
products like Wheat, rice, apple and mango.
Branding-Brand is a symbol, a mark, or a name that acts as means of
communication to bring about an identity of the product.
Distinct individuality of the product.
2.Packaging
Individuality to a product.
Protect the goods form damage and facilitate easy transfer of goods to
customers.
Branding the product.
Labelling- Communicate brand , grade and give other informations like
distinctive features, its composition, its performance etc.
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3.Storage
 Goods are stored in warehouse to protect form damage.
Warehouse creates time utility.
Marketing services like grading , packaging, labelling.
4.Transportation
Transfer of goods from the place of production to the place of consumption.
 Creates time utility in goods and services as speedy transport minimizes the
time of transit.
Influence price of the product.
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D. Functions Facilitating Exchange
1.Salesmanship
•Personal selling
•Direct and personal contact with the buyer.
2.Advertising
 Spread the message of the product and promote the sale.
Creates a non personal link between the advertiser and the receivers of the
message.
Advertising media- Newspapers, magazines, radio, television, hoardings,
window displays etc.
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3.Pricing.
•Price of a product is influenced by the cost of product and services offered,
profit margin desired, prices fixed by the rival firm and Government policy.
4.Financing
•Financing of customer purchasing as become an integral part.
• Provision of goods to customers on credit basis has become important in
increasing the volume of sales.- Also credit facilities to retailers and
wholesalers.
5.Insurance
•Risks are involved in the exchange of goods and services. Insurance
facilitates the smooth exchange of goods covering risks in storage and
transportation.
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MARKETING ENVIRONMENT
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Importance
Develop broad strategies and long term policies.
Analyze competitor's strategies and formulate effective
counter strategies.
Knowledge about changing environment will keep the
organisation dynamic in approach.
Adjust to the prevailing condition of the environment.
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Marketing Environment
 All the external factors and forces that affect a firm’s ability to
develop and maintain successful transactions and relationships
with the target customers.
 It brings opportunities or threats to the firm.
Marketing Environment External environment.
Internal environment.
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Internal Environment
 Controllable factors
 Organization modify or alter the factors to suit the
environment.
 Internal environment consists mainly the marketing mix
 Organizational recourses, R & D , Finance, Marketing and
Operational capabilities.
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External Environment
(uncontrollable factors)
Micro Environment Macro Environment
1. Suppliers
2. Customers
3. Intermediaries
4. Competitors
5. Public
1. Demographic
2. Economic
3. Natural/
Physical
4. Technological
5. Politico- legal
6. Socio-cultural
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1. Demographic Environment
 Level of population growth, age ,sex, education patterns, family
influences and shifts.
2. Economic Environment
factors
Economic conditions
Economic Policies
Economic Systems
1.Free Market Economic Systems
2.Centrally Planned Economies
3.Mixed Economies
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3.Natural Environment
Modern technology in industry may cause a rapid deterioration of the physical
environment i.e. air pollution, water pollution, noise pollution etc.
Assessed by biologist, ecologist, sociologist and conservationists.
Consider physical environmental factors – quality and quantity of existing forest
wealth, possibility rain, the exploitation of sea products, the health hazards out of
pollution.
4. Political/ Legal Environment
Political system in the country decides, promotes and controls business
activities.
Pass legislation on matters as wages and prices, employment opportunities,
safety and health at work, location, what the plant can emit into the air, how much
noise etc.
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5.Tecnological Environment
•Changes affects the production methods, processes and consumption of raw
materials for the manufacture of product.
•Affects more for volatile industries than, stable industries.
6.Social and Cultural Environment
Encompasses the economic, political, legal and technological factors.
Socio-cultural customs and beliefs of the people shape the economy, the
political legal system and technology.
Affects the strategies of the organisation.
Culture determines, the type of goods and services a business should produce.
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Environmental Scanning
Organizations assemble a team of specialists to continually
collect and evaluate environmental information.
Goal is to identify future market opportunities and threats.
Competitor moves can be anticipated and countered.
Marketer is able to know the organizational strengths,
capabilities and related opportunities.
Can easily adapt to the uncontrollable environment.
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