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Introduction to marketing management


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A new way to look at marketing... Introductory session to Hospital Management Students of BK School of Business Management, Gujarat University taken on 22 September 2011.

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Introduction to marketing management

  1. 1. Introduction to
  2. 2. But first, let’s break some ice…
  3. 3. Deliverables of today’s session <ul><li>Introduction to Marketing (10 mins) </li></ul><ul><ul><li>The Marketing concept (15 mins) </li></ul></ul><ul><ul><li>Marketing Mix (45 mins) </li></ul></ul><ul><ul><ul><li>Product </li></ul></ul></ul><ul><ul><ul><li>Price </li></ul></ul></ul><ul><ul><ul><li>Promotion </li></ul></ul></ul><ul><ul><ul><li>Place </li></ul></ul></ul><ul><ul><li>STP (Segmentation, Targeting and Positioning) (15 mins) </li></ul></ul>
  4. 4. Also, a glimpse of: <ul><li>The Marketing Specializations: (30 mins) </li></ul><ul><ul><li>Consumer Behavior </li></ul></ul><ul><ul><li>Marketing Research </li></ul></ul><ul><ul><li>Sales and distribution </li></ul></ul><ul><ul><li>Integrated Marketing Communications </li></ul></ul><ul><ul><li>Services Marketing </li></ul></ul><ul><ul><li>International Marketing </li></ul></ul><ul><ul><li>Brand Management </li></ul></ul>
  5. 5. Introduction to Marketing
  6. 6. From the time you wake up..
  7. 7. <ul><li>Turn off that alarm – brush your teeth – take a shower – have breakfast – get dressed – travel to work – use the copier – go out for dinner at ____ - fall asleep </li></ul><ul><li>We use more than 250 brands by the time our day ends !! </li></ul>
  8. 8. Marketing is omnipresent ..! <ul><li>“ The average person in a metro-city is exposed to over 3,000 advertising messages a day…!!” </li></ul><ul><li>...consciously or otherwise. </li></ul><ul><li>Source: </li></ul>
  9. 9. <ul><li>We are constantly being targeted !! </li></ul>
  10. 10. Marketing is natural… <ul><li>Analogy of marketing with the nature’s law of “survival of the fittest” </li></ul>
  11. 12. What Can Be Marketed? <ul><li>Goods </li></ul><ul><li>Services </li></ul><ul><li>Experiences </li></ul><ul><li>Events </li></ul><ul><li>Persons </li></ul><ul><li>Places </li></ul><ul><li>Properties </li></ul><ul><li>Organizations </li></ul><ul><li>Information </li></ul><ul><li>Ideas </li></ul>To accompany A Framework for Marketing Management, 2 nd Edition Slide in Chapter 1
  12. 13. Let’s define…
  13. 14. <ul><li>‘ Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably’ </li></ul><ul><li>The Chartered Institute of Marketing </li></ul>
  14. 15. ‘ The right product, in the right place, at the right time, and at the right price’ Adcock et al
  15. 16. ‘ Marketing is the human activity directed at satisfying human needs and wants through an exchange process’ Philip Kotler
  16. 17. <ul><li>The AMA definition: </li></ul><ul><ul><li>“Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.” </li></ul></ul>To accompany A Framework for Marketing Management, 2 nd Edition Slide in Chapter 1
  17. 18. No single definition or approach <ul><li>But the c ommon subject matters: </li></ul><ul><ul><li>The ability to satisfy customers, </li></ul></ul><ul><ul><li>The identification of favorable marketing opportunities </li></ul></ul><ul><ul><li>The need to create an edge over competitors </li></ul></ul><ul><ul><li>The capacity to make profits to enable a viable future for the organization </li></ul></ul><ul><ul><li>The aim to increase market share mainly in target markets </li></ul></ul>
  18. 19. Some marketing Gurus..
  19. 20. Evolution of the marketing concept
  20. 21. Company Orientations Towards the Marketplace Production Concept Product Concept Selling Concept Marketing Concept Consumers prefer products that are widely available and inexpensive <ul><li>Consumers favor products that </li></ul><ul><li>offer the most quality, performance, </li></ul><ul><li>or innovative features </li></ul>Consumers will buy products only if the company aggressively promotes/sells these products Focuses on needs/ wants of target markets & delivering value better than competitors
  21. 22. Societal Marketing Concept Societal Marketing Concept Company (Profits) Consumers (Want Satisfaction) Society (Human Welfare)
  22. 23. Modern Marketing Concept Traditional Organization Chart Customers Front-line people Middle Management Top Management
  23. 24. Modern Marketing Concept Customer-Oriented Organization Chart Customers Front-line people Middle management Top manage- ment Customers Customers
  24. 25. Simple Marketing System To accompany A Framework for Marketing Management, 2 nd Edition Slide in Chapter 1
  25. 26. Core Concepts of Marketing Needs, wants, and demands Products and services Value and satisfaction Exchange, transactions, and relationships Markets
  26. 27. The Marketing Mix <ul><li>Developed to achieve the company’s objectives. </li></ul><ul><li>Also called: </li></ul><ul><li>4 P’s of </li></ul><ul><li>Marketing </li></ul>
  27. 28. Product
  28. 29. What is a Product? <ul><li>A product is anything that can be offered to a market to satisfy a want or need, including physical goods, services, experiences, events, persons, places, properties, organizations, information, and ideas. </li></ul>
  29. 30. Product Mix <ul><li>Total sum of all products and variants offered by an organization </li></ul>
  30. 31. Five Product Levels
  31. 32. ‘Hotel’ Example: <ul><li>Core product: ‘rest and sleep’ </li></ul><ul><li>Basic product: room includes bed, bathroom, towels, desk, dresser, closet </li></ul><ul><li>Expected product: clean bed, fresh towels, working electrical utilities </li></ul><ul><li>Augmented product: exceeds customer expectations </li></ul><ul><li>Potential product: which includes all possible augmentations and transformations </li></ul>
  32. 33. Product Differentiation <ul><li>Product form </li></ul><ul><li>Features </li></ul><ul><li>Customization </li></ul><ul><li>Performance </li></ul><ul><li>Conformance </li></ul><ul><li>Durability </li></ul><ul><li>Reliability </li></ul><ul><li>Repairability </li></ul><ul><li>Style </li></ul>
  33. 34. Service Differentiation <ul><li>Ordering ease </li></ul><ul><li>Delivery </li></ul><ul><li>Installation </li></ul><ul><li>Customer training </li></ul><ul><li>Customer consulting </li></ul><ul><li>Maintenance and repair </li></ul>
  34. 35. Product Life Cycle
  35. 36. Some products are just great..
  36. 38. But there are risks Involved: <ul><li>There is always a RISK of product failure due to: </li></ul><ul><li>Failure of conventional marketing research </li></ul><ul><li>Failure to gauge consumer tastes </li></ul><ul><li>Outsmarted by competition </li></ul>
  37. 39. Some Products That Failed.. Source:
  38. 40. People tend to pamper their pets, so it’s not far-fetched to believe consumers might serve bottled water to their cats and dogs. But despite the fact that the water came in such delicious flavors as Crispy Beef and Tangy Fish, it never seemed to catch on..
  39. 41. <ul><li>In what must be one of the most bizarre brand extensions ever Colgate decided to use its name on a range of food products called Colgate’s Kitchen Entrees. </li></ul><ul><li>Needless to say, the products did not take off and never left U.S. soil. </li></ul>
  40. 42. <ul><li>Hockey Puck Mouse (1998-2000) by Apple </li></ul><ul><li>This design debacle came in an array of Jellies colors, but the cutesiness couldn't compensate for the awkward round shape. </li></ul><ul><li>The mouse was difficult to maneuver and the push button frustratingly evasive </li></ul><ul><li>The 2-foot cord only barely reached around from the left-side USB port of most App </li></ul>
  41. 43. <ul><li>After watching their share of the soft drink market shrivel for decades, in 1985 the Coca-Cola bottling company decided to do something about it: </li></ul><ul><li>They introduced the “New Coke” with a change in their secret formula of more than a 100 yrs. </li></ul><ul><li>Consumers revolted and ultimately the product failed. </li></ul>
  42. 44. New Product Testing <ul><li>It means that before the full-scale commercialization of new products, launching them into test markets to test its viability. </li></ul>
  43. 45. <ul><li>Coke is test marketing some really cool looking aluminum bottles for Coke Classic, Diet Coke, and Coke Zero at nightclubs and special vending machines. </li></ul>Source:
  44. 46. <ul><li>Vending machines being tested with “Google Wallet” smart phones </li></ul>Source:
  45. 47. PRICE
  46. 48. Definition: <ul><li>In ordinary usage, price is the quantity of payment or compensation given by one party to another in return for goods or services. </li></ul>
  47. 49. Objectives of Pricing <ul><li>Short-term profit maximization </li></ul><ul><li>Short-term revenue maximization </li></ul><ul><li>Maximize quantity </li></ul><ul><li>Maximize profit margin </li></ul><ul><li>Differentiation </li></ul><ul><li>Survival </li></ul>Source:
  48. 50. Pricing Strategies
  49. 51. Major Pricing Strategies <ul><li>Price Vs. Non-price competition </li></ul><ul><li>Market entry strategies </li></ul><ul><li>Discounts and allowances </li></ul><ul><li>Geographic pricing strategies </li></ul><ul><li>Special pricing strategies </li></ul>
  50. 52. Place
  51. 53. Marketing Channels and Supply Chain Management The fourth ‘P’ of marketing (place)
  52. 54. How a Distributor Reduces the Number of Channel Transactions = Customer = Manufacturer 1 3 2 4 5 6 7 8 9
  53. 55. How a Distributor Reduces the Number of Channel Transactions = Distributor = Customer = Manufacturer Store 1 2 3 4 5 6
  54. 56. Consumer Marketing Channels Wholesaler Distributor Retailer Consumer     Consumer Retailer Consumer  Manufacturer 0-level channel Wholesaler Retailer Consumer   Mfg 2-level channel Mfg 3-level channel 1-level channel Manufacturer
  55. 57. Conventional Distribution Channel vs. Vertical Marketing Systems Vertical marketing channel Manufacturer Retailer Conventional marketing channel Manufacturer Wholesaler Forward & Backward Integration Eg. ITC Ashirwad atta Sunfeast Consumer Consumer Retailer Wholesaler
  56. 58. Channel Management Decisions Selecting FEEDBACK Motivating Training Evaluating
  57. 59. Promotion
  58. 60. Concept of ‘Promotion’ <ul><li>Promotion is all personal and impersonal efforts by a seller to </li></ul><ul><ul><li>Inform </li></ul></ul><ul><ul><li>Persuade or </li></ul></ul><ul><ul><li>Remind a target audience . </li></ul></ul>
  59. 61. Promotion includes: <ul><li>Personal Selling </li></ul><ul><li>Advertising </li></ul><ul><li>Sales Promotion </li></ul><ul><li>Public Relations (PR) </li></ul>
  60. 63. Personal Selling <ul><li>Direct presentation of a product to a prospective customer by a representative of the organization selling it. </li></ul><ul><ul><li>Face to face </li></ul></ul><ul><ul><li>Over the phone </li></ul></ul>
  61. 64. Advertising <ul><li>The non-personal communication of information usually paid for & usually persuasive in nature, about products (goods & services) or ideas by identified sponsor through various media. </li></ul><ul><ul><li>Broadcast media (TV, Radio) </li></ul></ul><ul><ul><li>Print media (newspapers, magazines) </li></ul></ul><ul><ul><li>Outdoor media (billboards) </li></ul></ul><ul><ul><li>Internet </li></ul></ul><ul><ul><li>Mobile phones </li></ul></ul><ul><ul><li>Other media </li></ul></ul>
  62. 65. Sales Promotion <ul><li>Incentives given to encourage sales and help personal selling. </li></ul><ul><ul><li>Premiums </li></ul></ul><ul><ul><li>Event sponsorships </li></ul></ul><ul><ul><li>Contests </li></ul></ul><ul><ul><li>Trade shows </li></ul></ul><ul><ul><li>In-store displays, samples, rebates </li></ul></ul><ul><ul><li>Discounts and coupons </li></ul></ul><ul><ul><li>If given to channel partners: Trade Promotion </li></ul></ul>
  63. 66. Public Relations <ul><li>Efforts to develop favorable attitudes and opinions about products/organizations </li></ul><ul><ul><li>Newsletters </li></ul></ul><ul><ul><li>Annual reports </li></ul></ul><ul><ul><li>Lobbying, charitable events etc. </li></ul></ul><ul><li>Publicity </li></ul><ul><ul><li>News stories about organization & products </li></ul></ul>
  64. 67. Marketing Concept - The 4 P’s & The 4 Cs Marketing Mix Customer Solution Customer Cost Communication Convenience Product Price Promotion Place
  65. 68. Marketing Concept - The 4 P’s
  66. 69. The extended marketing mix <ul><li>Also called the service marketing mix </li></ul><ul><li>People </li></ul><ul><li>Process </li></ul><ul><li>Physical Evidence </li></ul>
  67. 70. STP <ul><li>Segmentation </li></ul><ul><li>Targeting </li></ul><ul><li>Positioning </li></ul>
  68. 71. Glimpse of Marketing Specializations <ul><ul><li>Consumer Behavior </li></ul></ul><ul><ul><li>Marketing Research </li></ul></ul><ul><ul><li>Sales and distribution </li></ul></ul><ul><ul><li>Integrated Marketing Communications </li></ul></ul><ul><ul><li>Services Marketing </li></ul></ul><ul><ul><li>International Marketing </li></ul></ul><ul><ul><li>Brand Management </li></ul></ul>
  69. 72. <ul><li> </li></ul>