1.1 Marketing Management (1).pptx

Introduction to Marketing
Chapter 1
Virinchi College, MBA, Marketing Management, 2023

What marketing
isn’t!!!
Sales Branding
Advertisement Boring

Misconceptions About Marketing!
• Marketing is ‘Guff’ • Marketing is emotionally fooling
people to buy what they don’t
want to buy!

Major business functions
Operation
Finance
Marketing

The process by which companies create value for customers and build
strong customer relationship in order to capture value from customers in
return

What is Marketing?
Marketing is an organizational function and a set of processes for creating,
communicating, and delivering value to customers and for managing
customer relationships in ways that benefit the
organization and its stakeholders.
(American Marketing Association Formal Definition)

Marketing Management
Art and science of choosing target markets and getting, keeping and
growing customers through creating delivering and communicating
super value

Role of Marketing in Developing Successful
Business Strategies
• Identify customer needs
• Design products that meet those needs
• Communicate information about those goods/service to the
prospective buyers
• Make the product available at times and place that meet the
customer needs
• Pricing merchandise and service to reflect costs, competition and
liability of the customers to buy
• Providing necessary service and follow up to ensure customer
satisfaction after the purchase.

Creating customer the right way
Identify needs
of the
customers in
the marketplace
Find out what
needs the
organization
can profitably
serve
Developing
goods/services
to convert
potential
buyers into
customers

It’s all about value!!!
Creating value
Communicating
value
Delivering
value
Retaining Value

Satisfaction vs Value
Value = Benefit – Cost
Satisfaction = Expectation vs Reality

Value is sum tangible and
intangible benefits and costs to a
customer
Satisfaction is the balance
between customers expectation
and actual performance of a
product
Price
Service
Quality
Customer Value Triad
Satisfaction vs Value

What is Marketed?
Goods
Services
Events & Experiences
Persons
Places & Properties
Organizations
Information
Ideas

Customer do not buy product/service, they buy solutions

Market
The set of all actual and potential buyers of a product or service

Marketplaces, marketspace & Metamarket
Metaspace
Cluster of complementary products and services closely related in the minds of the customers but
spread across a diverse set of industries. (e.g. Automobile metamarket-automobile manufacturers,
new and used car dealer, financing companies, classified auto ads in the newspapers).
Marketspace
Digitalized form of shopping on the internet, (online shopping, e-commerce).
Marketplace
A physical store or a place where goods are purchased. (e.g. Retail shops, department stores,
shopping malls etc

Structure of Flows in a Modern Exchange
Economy

A Simple Marketing Process

Key Customer Market
Consumer
Market
Business
Market
Global Market
Nonprofit and
Government
Market

Need, Want and Desire
Basic human
requirement
Food, clothing,
shelter,
education,
entertainment
Needs
Directed to
specific products
that satisfy
needs, localized
Food -????????
Wants
Wants for
specific products
backed by ability
to pay
Can you demand
??
Demands

Core Marketing Concepts
Needs Meaning
Stated Needs Specifically “what” the customer asks for An inexpensive car
Real Needs What the stated need actually means; what
value the customer is going to derive from the
stated goods
Car whose operating cost, not initial price, is
low
Unstated Needs What customer expects implicit with the
goods/service
The customer expects good service from the
dealer
Delight Needs Needs that are not expected, but would delight
(provide WOW factor) to the customer
The customer would like the dealer to
include an onboard GPS navigation system
Secret Needs Needs that the customers do not express, as
they are intangible
The customer wants friends to see him or
her as a savvy customer

Core Marketing Concepts
Target Markets , Positioning and Segmentation.

Definition
Segmentation
Divide market into smaller
group with distinct
characteristics
Targeting
Evaluating each market
segment’s attractiveness and
selecting one or more market
segment to enter
Differentiation
Differentiating a firm’s market
offering to create a superior
customer value
Positioning
Arranging market offering to
occupy a clear, distinctive, and
desirable place relative to
competing product in the
minds of the target customer.

Offerings and Brands
Tangible Goods
Offering
Intangible value
proposition
Brand
Offering from known Source
(In people’s mind)

Marketing
Channel
Communication
Channel
Deliver and receive message
Newspaper, magazine, radio,
TV, mail telephone, billboards,
internet
Distribution
channel
Display, sell, or deliver
physical product or service
Internet, Mobile phone,
Distributor, wholesalers,
retailers, agents
Service Channel
Carryout transaction with the
buyer
Warehouse, transportation
companies, banks, insurance
companies

Marketing Environment
Micro/Task Environment
Directly related to company
Macro/Broad/General Environment
Uncontrollable forces

The New Marketing
Realities

Major Societal Forces
• Network information technology
• Globalization
• Deregulation
• Privatization
• Heightened Competition
• Industry convergence
• Retail transformation
• Disintermediation
• Consumer Buying Power
• Consumer Information
• Consumer participation
• Consumer resistance

New Company Capabilities
• Use the Internet as powerful information and sales
channel
• Collect fuller and richer information about markets,
customers, prospects, and competitors
• Tap into social media to amplify their brand
message
• Can reach consumers on the move with mobile
marketing
• Make and sell individually differentiated goods
• Improve purchasing, recruiting, training and internal
and external communication
• Facilitate and speed up internal communication
among their employees by using the internet as
private intranet
• Improve their cost efficiency by skillful use of
internet

Marketing Planning
Marketing planning process consists of analyzing marketing
opportunities, selecting target markets, designing marketing strategies,
developing marketing programs, and managing the marketing effort.

The New CMO (Chief Marketing Officer)
• Infuse customer perspective and orientation in business decisions affecting any customers
touch point
• Responsible for overall marketing strategy
• Infuse value of the company to the customer
• Marketing campaign and budgets
• More qualities required for global firm
Innate qualities
Risk taker
Willingness to make decision
Problem solving ability
Change agent
Result oriented
Learned Qualities
Global experience
Multichannel experience
Cross industry experience
Digital focus
Operational knowledge

Marketing Mix
4Ps Target
Market
Product
Place
Price
Promotion

Marketing Mix
7Ps Target
Market
Product
Place
Price
Promotion
People
Process
Physical
evidence

Marketing mix

Traditional vs Modern Marketing Mix

Capturing value from customers
• Creating customer loyalty and retention –
Create Delight
• Growing share of customer – Cross sell
• Building customer equity – Customer’s life
time value

You are going to open a new College (MBA)
• Identify your target market
• Identify 4Ps and the entire holistic marketing scope

Marketing Management Task
Developing marketing straggles and plans
Capturing marketing insights
Connecting with customers
Building strong brand
Shaping the Market Offerings
Delivering value
Communicating value
Creating successful long term growth

The Marketing Process

Evolution of marketing philosophies
Production Product Selling Marketing Societal
Marketing

Production concept
This concept holds that customers prefer those
products and services that are widely available
and are not expensive to purchase
• Organizations that follow this concept are the
ones who focus on achieving high production
efficiency, low costs and mass distribution
• One of the oldest concepts in Marketing

Product concept
This concept holds that customers prefer
those products that are the best in
quality, performance and innovation.
• Manufacturers who follow this concept
produce goods for quality oriented
customers.

Selling Product
The concept believes that the customer will
not buy enough of the firm’s products unless
it under-takes a large-scale selling and
promotion effort.
• The companies who follow this strategy
spend a lot on advertising and promotion
without which selling their products
becomes very difficult. Example: Life-
Insurance.

Marketing Concept
This concept believes that the key to achieving
organizational goals is being more effective,
than the competitors, in creating, delivering
and communicating superior customer value.
• The company that follows this strategy
believes in not finding the right customers for
their products, but the right products for their
customers.
• Dell allows its customers to customize the
features that he or she desires in the machine.

Selling vs Marketing Concept

Societal marketing concept
A company should make good marketing
decisions by considering customer’s
wants, the company’s requirement,
consumer’s long-run interest and
society’s long run interest.
• Sustainable marketing, socially and
environmentally responsible marketing

Holistic
Marketing
Concept

Relationship Marketing
Relationship marketing aims to build mutually satisfying long-term
relationships with key constituents(stakeholders) in order to earn and
retain their business.
1. Customers
2. Employees
3. Marketing partners (channels, suppliers,
distributors, dealers)
4. Financial community (shareholders,
investors)

Integrated Marketing
Marketer devises marketing activities and assembles marketing programs
to create, communicate and deliver value for customers
(1) many different marketing activities can create, communicate, and
deliver value and
(2) marketers should design and implement any one marketing activity
with all other activities in mind.

Internal marketing
Internal marketing is the task of hiring, training and motivating able
employees who want to serve customers well.
when engineering designs the right products, finance furnishes the right amount of
funding, purchasing buys the right materials, production makes the right products
in the right time horizon, and accounting measures profitability in the right ways

Potential challenges in integrating marketing
The marketing vice president of a major European airline wants to
increase the airline’s traffic share. His strategy is to build up customer
satisfaction by providing better food, cleaner cabins, better-trained cabin
crews, and lower fares, yet he has no authority in these matters.
The catering department chooses food that keeps food costs down; the
maintenance department uses inexpensive cleaning services; the human
resources department hires people without regard to whether they are
naturally friendly; the finance department sets the fares.
Because these departments generally take a cost or production point of
view, the vice president of marketing is stymied in his efforts to create an
integrated marketing program

Performance marketing
• Understanding financial and non financial returns to business and
society from marketing activities and programs
• Legal, ethical, social and environmental effects of marketing activities
and programs.

Bhatbhateni Supermarket

Nepal Telecom

Panchakanya Group

Ncell - Axiata

Bottlers Nepal

Nestle Hired a Psychoanalyst to Convert a
Nation to Coffee

Acquiring new customers Vs Retaining old
customers

Building customer relationships
Customer Relationship Management (CRM)
• Building and maintaining profitable customer
relationships by delivering superior value and
satisfaction.
• Acquire → Keeping→ Growing customers
• Building blocks – Customer Value and
Satisfaction
• Level of relationship

Building customer relationships
Changing nature of customer relationship
• Relating with more carefully selected customers
• Relating more deeply and interactively
• Two way customer relationship
• Customer generated marketing

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