Introduction to Infrastructure Marketing

Introduction to Infrastructure
Marketing
Farook A Azam

(MBA-IM,PGD-IM,BE)

Infr...
Introduction to Infrastructure Marketing

Flow of Presentation
• Definition & Overview on Infrastructure
• Role of MBA’s i...
Introduction to Infrastructure Marketing

What is Infrastructure ?
• Infrastructure is basic physical and organizational s...
Introduction to Infrastructure Marketing

History of the term
•

According to the Online Etymology Dictionary,the word inf...
Introduction to Infrastructure Marketing

History of the term contd....
• That public-policy discussion was hampered by la...
Introduction to Infrastructure Marketing

History of Indian Infrastructure
• Infrastructure before 1700 consisted mainly o...
Introduction to Infrastructure Marketing

Types of Infrastructure
• Hard Infrastructure
"hard" infrastructure refers to th...
Introduction to Infrastructure Marketing

Assets and facilities
Airports
 Bridges
 Broadband
 Canals
 Critical infras...
Introduction to Infrastructure Marketing

Concepts
1.
2.
3.
4.

Asset management
Appropriation
Lindahl tax
Build-OperateTr...
Introduction to Infrastructure Marketing

Issues and ideas













Air traffic control
Brownfield
Carbon ...
Introduction to Infrastructure Marketing

Fields of study
• Architecture

• Civil
• Electrical
• Mechanical engineering
• ...
Introduction to Infrastructure Marketing

Fields of study contd…

 Most infrastructure is designed by engineers, urbanist...
Introduction to Infrastructure Marketing

Economic Analysis
Cost-benefit analysis

Equivalent annual cost

Future Worth

I...
Introduction to Infrastructure Marketing

Typical attributes
Hard infrastructure generally has the following
attributes
– ...
Introduction to Infrastructure Marketing

Economics, management,
engineering, and impacts
The following concerns mainly ha...
Introduction to Infrastructure Marketing

Infrastructure in the developing
world
According to researchers at the Overseas ...
Introduction to Infrastructure Marketing

Roles of MBA’s in Infrastructure Mgmt..
Objectives : Generate young, well traine...
Introduction to Infrastructure Marketing

MOVIE CLIP

MBA~ IM – VTU
Introduction to Infrastructure Marketing

Introduction to Marketing

MBA~ IM – VTU
Introduction to Infrastructure Marketing

What Is Marketing?
Simple definition:
“Marketing is the management process respo...
Introduction to Infrastructure Marketing

Marketing Defined
• Marketing is the activity, set of instructions, and processe...
Introduction to Infrastructure Marketing

Why is Marketing Important?
Shifting Business Paradigms

Buyers’ markets
Sellers...
Introduction to Infrastructure Marketing

The Marketing Process
A simple model of the marketing process:
• Understand the ...
Introduction to Infrastructure Marketing

Needs, Wants, and Demands
Need: State of felt deprivation including physical, so...
Introduction to Infrastructure Marketing

Need/ Want Fulfillment
Needs & wants are fulfilled through a Marketing

Offering...
Introduction to Infrastructure Marketing

Customer Value and Satisfaction
Dependent on the product’s perceived performance...
Introduction to Infrastructure Marketing

Marketing Management
The art and science of choosing target markets
and building...
Introduction to Infrastructure Marketing

Marketing Management
Marketing managers must consider the following,
to ensure a...
Introduction to Infrastructure Marketing

Choosing a Value Proposition
The set of benefits or values a company promises
to...
Introduction to Infrastructure Marketing

The Marketing Concept
The marketing concept:
“A marketing management philosophy ...
Introduction to Infrastructure Marketing

Customer Perceived Value
Customer perceived value:
– “Customer’s evaluation of t...
Introduction to Infrastructure Marketing

The Marketing Mix
The set of controllable, tactical marketing tools that
the fir...
Introduction to Infrastructure Marketing

Infrastructure Projects
Marketing Point of View

MBA~ IM – VTU
Introduction to Infrastructure Marketing

Few examples of Infrastructure Projects
• Airport projects
• METRO RAIL projects...
Introduction to Infrastructure Marketing

SEZ’s : IT Sector Specific
• Multi Product SEZ : Mundra port (Gujrat)

• IT SEZ:...
Introduction to Infrastructure Marketing

Road Projects
• Golden Quadrilateral

• NSEW Corridor
• Bangalore ~ Chennai Expr...
Introduction to Infrastructure Marketing

Integrated Townships
• DLF City ~ Gurgaon

• Manhattan ~ NY
• BMIC Corridor
• La...
Introduction to Infrastructure Marketing

Thank You
Continue in next class…….

MBA~ IM – VTU
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Introduction class on Services Marketing for Infrastructure Utilities

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Definition & Overview on Infrastructure
Role of MBA’s in IM
Intro to Marketing
Few Examples on Infrastructure Projects from Marketing point of view
Project Movie Clip On Infrastructure Project

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Introduction class on Services Marketing for Infrastructure Utilities

  1. 1. Introduction to Infrastructure Marketing Introduction to Infrastructure Marketing Farook A Azam (MBA-IM,PGD-IM,BE) Infrastructure consultant @ BIG & Faculty @ VTU MBA~ IM – VTU
  2. 2. Introduction to Infrastructure Marketing Flow of Presentation • Definition & Overview on Infrastructure • Role of MBA’s in IM • Intro to Marketing • Few Examples on Infrastructure Projects from Marketing point of view • Project Movie Clip On Infrastructure Project MBA~ IM – VTU
  3. 3. Introduction to Infrastructure Marketing What is Infrastructure ? • Infrastructure is basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function. It can be generally defined as the set of interconnected structural elements that provide framework supporting an entire structure of development. It is an important term for judging a country or region's development. • The term typically refers to the technical structures that support a society, such as roads, bridges, water supply, sewers, electrical grids, telecommunications, and so forth, and can be defined as "the physical components of interrelated systems providing commodities and services essential to enable, sustain, or enhance societal living conditions." • Viewed functionally, infrastructure facilitates the production of goods and services, and also the distribution of finished products to markets, as well as basic social services such as schools and hospitals; for example, roads enable the transport of raw materials to a factory. MBA~ IM – VTU
  4. 4. Introduction to Infrastructure Marketing History of the term • According to the Online Etymology Dictionary,the word infrastructure has been used in English since at least 1927, originally meaning "The installations that form the basis for any operation or system". • Other sources, such as the Oxford English Dictionary, trace the word's origins to earlier usage, originally applied in a military sense. The word was imported from French, where it means subgrade, the native material underneath a constructed pavement or railway. The word is a combination of the Latin prefix "infra", meaning "below", and "structure". The military use of the term achieved currency in the United States after the formation of NATO in the 1940s, and was then adopted by urban planners in its modern civilian sense by 1970. • The term came to prominence in the United States in the 1980s following the publication of America in Ruins,which initiated a public-policy discussion of the nation’s "infrastructure crisis", purported to be caused by decades of inadequate investment and poor maintenance of public works. This crisis discussion has contributed to the increase in infrastructure asset management and maintenance MBA~ IM – VTU
  5. 5. Introduction to Infrastructure Marketing History of the term contd.... • That public-policy discussion was hampered by lack of a precise definition for infrastructure. A US National Research Council panel sought to clarify the situation by adopting the term "public works infrastructure", referring to: • "... both specific functional modes – highways, streets, roads, and bridges; mass transit; airports and airways; water supply and water resources; wastewater management; solid-waste treatment and disposal; electric power generation and transmission; telecommunications; and hazardous waste management – and the combined system these modal elements comprise. A comprehension of infrastructure spans not only these public works facilities, but also the operating procedures, management practices, and development policies that interact together with societal demand and the physical world to facilitate the transport of people and goods, provision of water for drinking and a variety of other uses, safe disposal of society's waste products, provision of energy where it is needed, and transmission of information within and between communities MBA~ IM – VTU
  6. 6. Introduction to Infrastructure Marketing History of Indian Infrastructure • Infrastructure before 1700 consisted mainly of roads and canals. Canals were used for transportation or for irrigation. Sea navigation was aided by ports and lighthouses  The Indus Valley Civilization in India and Pakistan from c3300 BCE had a sophisticated canal irrigation system.  Roads were build by emperor Ashoka Maurya (ca. 269 BCE to 232) BCEhad planted trees beside roads and constructed shelter for shade for Road users.  Emperor Akbar has Build the Road in Kashmir, at present day it is called as Moghul Road (NH1), which his army used it for military purposes as well as for tread and commerce.  Down South Hyderali and Tipu sultan built irrigation canals, Roads, facilities for industries and ports especially in costal Malabar and Mangalore to tap the overseas business for MYSORE State. MBA~ IM – VTU
  7. 7. Introduction to Infrastructure Marketing Types of Infrastructure • Hard Infrastructure "hard" infrastructure refers to the large physical networks necessary for the functioning of a modern industrial nation. • Soft Infrastructure whereas "soft" infrastructure refers to all the institutions which are required to maintain the economic, health, and cultural and social standards of a country, such as the financial system, the education system, the health care system, the system of government, and law enforcement, as well as emergency services. MBA~ IM – VTU
  8. 8. Introduction to Infrastructure Marketing Assets and facilities Airports  Bridges  Broadband  Canals  Critical infrastructure  Dams  Electricity  Energy  Hazardous waste  Hospitals  Levees  Lighthouses  Mass Transit              Parks Ports Public housing State schools Public spaces Rail Roads Sewage Solid waste Telecommunications Utilities Water supply Wastewater MBA~ IM – VTU
  9. 9. Introduction to Infrastructure Marketing Concepts 1. 2. 3. 4. Asset management Appropriation Lindahl tax Build-OperateTransfer 5. Design-Build 6. Earmark 7. Fixed cost 8. Engineering contracts 9. Externality 10. Government debt 11. Life cycle assessment 12. Maintenance 13. Monopoly 14.Property tax 15. Public-private partnership 16. Public capital 17. Public finance 18. Public good 19. Public sector 20. Renovation 21. Replacement (upgrade) 22. Spill over effect 23. Supply chain 24. Taxation ** These concepts are of Global level , it may change country to country MBA~ IM – VTU
  10. 10. Introduction to Infrastructure Marketing Issues and ideas             Air traffic control Brownfield Carbon footprint Containerization Congestion pricing Ethanol fuel Fuel tax Groundwater High-speed rail Hybrid vehicles Land-use planning Mobile data terminal  Pork barrel Rapid bus transit Recycling  Renewable  Reverse osmosis  Smart grid  Smart growth  Storm water  Urban sprawl  Traffic congestion  Transit-oriented development  Vehicle efficiency  Waste-to-energy  Weatherization  Wireless technology , etc.. MBA~ IM – VTU
  11. 11. Introduction to Infrastructure Marketing Fields of study • Architecture • Civil • Electrical • Mechanical engineering • Public economics • Public policy • Urban planning MBA~ IM – VTU
  12. 12. Introduction to Infrastructure Marketing Fields of study contd…  Most infrastructure is designed by engineers, urbanists or architects. Generally road and rail transport networks, as well as water and waste management infrastructure are designed by civil engineers, electrical power and lighting networks are designed by power engineers and electrical engineers, and telecommunications, computing and monitoring networks are designed by systems engineers.  In the case of urban infrastructure, the general layout of roads, sidewalks and public places may sometimes be designed by urbanists or architects, although the detailed design will still be performed by civil engineers. If a building is required, it is designed by an architect, and if an industrial or processing plant is required, it may be designed by industrial engineer or a process engineer. MBA~ IM – VTU
  13. 13. Introduction to Infrastructure Marketing Economic Analysis Cost-benefit analysis Equivalent annual cost Future Worth Internal rate of return Present Worth Return on investment MBA~ IM – VTU
  14. 14. Introduction to Infrastructure Marketing Typical attributes Hard infrastructure generally has the following attributes – Capital assets that provide services – Large networks – Historicity and interdependence – Natural monopoly MBA~ IM – VTU
  15. 15. Introduction to Infrastructure Marketing Economics, management, engineering, and impacts The following concerns mainly hard infrastructure and the specialized facilities used for soft infrastructure. – Ownership and financing – Role of pension funds – Infrastructure as a new asset class for pension funds and SWFs – Infrastructure asset management – Engineering – Impact on economic development – Use as economic stimulus – Environmental impacts MBA~ IM – VTU
  16. 16. Introduction to Infrastructure Marketing Infrastructure in the developing world According to researchers at the Overseas Development Institute, the lack of infrastructure in many developing countries represents one of the most significant limitations to economic growth and achievement of the Millennium Development Goals (MDGs) • Regional differences The demand for infrastructure, both by consumers and by companies is much higher than the amount invested. There are severe constraints on the supply side of the provision of infrastructure in Asia. The infrastructure financing gap between what is invested in Asia-Pacific (around US$48 billion) and what is needed (US$228 billion) is around US$180 billion every year. MBA~ IM – VTU
  17. 17. Introduction to Infrastructure Marketing Roles of MBA’s in Infrastructure Mgmt.. Objectives : Generate young, well trained executives for India’s Infrastructure Sector to:  Convert the huge project investments into quality infrastructure  Upgrade existing infrastructure  Sustain high infrastructure service levels by adopting / evolving better management practices MBA~ IM – VTU
  18. 18. Introduction to Infrastructure Marketing MOVIE CLIP MBA~ IM – VTU
  19. 19. Introduction to Infrastructure Marketing Introduction to Marketing MBA~ IM – VTU
  20. 20. Introduction to Infrastructure Marketing What Is Marketing? Simple definition: “Marketing is the management process responsible for identifying, anticipating, and satisfying customer requirements profitably.” (CIM,2001) Goals: 1. Attract new customers by promising superior value. 2. Keep and grow current customers by delivering satisfaction. MBA~ IM – VTU
  21. 21. Introduction to Infrastructure Marketing Marketing Defined • Marketing is the activity, set of instructions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. OLD view of marketing: Making a sale—“telling and selling” NEW view of marketing: Satisfying customer needs MBA~ IM – VTU
  22. 22. Introduction to Infrastructure Marketing Why is Marketing Important? Shifting Business Paradigms Buyers’ markets Sellers’ markets MBA~ IM – VTU
  23. 23. Introduction to Infrastructure Marketing The Marketing Process A simple model of the marketing process: • Understand the marketplace and customer needs and wants. • Design a customer-driven marketing strategy. • Construct an integrated marketing program that delivers superior value. • Build profitable relationships and create customer delight. • Capture value from customers to create profits and customer quality. MBA~ IM – VTU
  24. 24. Introduction to Infrastructure Marketing Needs, Wants, and Demands Need: State of felt deprivation including physical, social, and individual needs. • Physical needs: Food, clothing, shelter, safety • Social needs: Belonging, affection • Individual needs: Learning, knowledge, self-expression Want: Form that a human need takes, as shaped by culture and individual personality. • Wants + Buying Power = Demand MBA~ IM – VTU
  25. 25. Introduction to Infrastructure Marketing Need/ Want Fulfillment Needs & wants are fulfilled through a Marketing Offering: • Products: – Persons, places, organizations, information, ideas. • Services: – Activity or benefit offered for sale that is essentially intangible and does not result in ownership. • Experiences: – Consumers live the offering. MBA~ IM – VTU
  26. 26. Introduction to Infrastructure Marketing Customer Value and Satisfaction Dependent on the product’s perceived performance relative to a buyer’s expectations. Care must be taken when setting expectations: • If performance is lower than expectations, satisfaction is low. • If performance is higher than expectations, satisfaction is high. Customer satisfaction often leads to consumer loyalty. Some firms seek to DELIGHT customers by exceeding expectations. MBA~ IM – VTU
  27. 27. Introduction to Infrastructure Marketing Marketing Management The art and science of choosing target markets and building profitable relationships with them. • Requires that consumers and the marketplace be fully understood. • Aim is to find, attract, keep, and grow customers by creating, delivering, and communicating superior value. MBA~ IM – VTU
  28. 28. Introduction to Infrastructure Marketing Marketing Management Marketing managers must consider the following, to ensure a successful marketing strategy: 1. What customers will we serve? — What is our target market? 2. How can we best serve these customers? — What is our value proposition? MBA~ IM – VTU
  29. 29. Introduction to Infrastructure Marketing Choosing a Value Proposition The set of benefits or values a company promises to deliver to consumers to satisfy their needs. • Value propositions dictate how firms will differentiate and position their brands in the marketplace. MBA~ IM – VTU
  30. 30. Introduction to Infrastructure Marketing The Marketing Concept The marketing concept: “A marketing management philosophy that holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfaction better than competitors” MBA~ IM – VTU
  31. 31. Introduction to Infrastructure Marketing Customer Perceived Value Customer perceived value: – “Customer’s evaluation of the difference between all of the benefits and all of the costs of a marketing offer relative to those of competing offers.” (Armstrong & Kotler) – Perceptions may be subjective – Consumers often do not objectively judge values and costs. Customer value = perceived benefits – perceived sacrifice. MBA~ IM – VTU
  32. 32. Introduction to Infrastructure Marketing The Marketing Mix The set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market. • Product: Variety, features, brand name, quality, design, packaging, and services. • Price: List price, discounts, allowances, payment period, and credit terms. • Place: Distribution channels, coverage, logistics, locations, transportation, assortments, and inventory. • Promotion: Advertising, sales promotion, public relations, and personal selling. MBA~ IM – VTU
  33. 33. Introduction to Infrastructure Marketing Infrastructure Projects Marketing Point of View MBA~ IM – VTU
  34. 34. Introduction to Infrastructure Marketing Few examples of Infrastructure Projects • Airport projects • METRO RAIL projects • Ports • SEZ’s • Roads (High ways, Expressways, corridors) • Urban Services & PURA • Integrated Townships and leisure's • Telecom Projects MBA~ IM – VTU
  35. 35. Introduction to Infrastructure Marketing SEZ’s : IT Sector Specific • Multi Product SEZ : Mundra port (Gujrat) • IT SEZ: DLF IT Park ~ Pune / ANZ IT SEZ ~ Bangalore • Multi product SEZ (Hassan) MBA~ IM – VTU
  36. 36. Introduction to Infrastructure Marketing Road Projects • Golden Quadrilateral • NSEW Corridor • Bangalore ~ Chennai Express way • Pune ~ Mumbai Express way • BMIC corridor MBA~ IM – VTU
  37. 37. Introduction to Infrastructure Marketing Integrated Townships • DLF City ~ Gurgaon • Manhattan ~ NY • BMIC Corridor • Lavasa City ~ LAVASA MBA~ IM – VTU
  38. 38. Introduction to Infrastructure Marketing Thank You Continue in next class……. MBA~ IM – VTU

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