Marketing Management introduction mix types

Introduction
of marketing mix
by Dr.Rajamani G
Assistant Professor
SRCAS
1

Defining Marketing
Defining Marketing
Marketing is a societal process by which
individuals and groups obtain what they
need and want through creating, offering,
and exchanging products and value with
others.
OR
Marketing is an organizational function and
set of processes for creating,
communicating and delivering value to
customers and for managing customer
relationships in a way that benefits the
organization and its stakeholders
2

Marketing Management
Marketing Management
Philosophies
Philosophies
3
Production Concept
Product Concept
Selling Concept
Marketing Concept
Societal Marketing Concept
•Consumers favor products that are
available and highly affordable.
•Improve production and distribution.
•Consumers favor products that offer
the most quality, performance, and
innovative features.
•Consumers will buy products only if
the company promotes/ sells these
products.
•Focuses on needs/ wants of target
markets & delivering satisfaction
better than competitors.
•Focuses on needs/ wants of target
markets & delivering superior value.

Core Marketing Concepts
Core Marketing Concepts
4
Needs, wants,
and demands
Products
Value,
satisfaction,
and quality
Exchange,
transactions,
and relationships
Markets

Need, Wants, Demands
Need, Wants, Demands
 Need. A human need is a state of felt
deprivation. Examples include the need
for food, clothing, warmth and safety.
 Wants. Wants are how people
communicate their needs. A hungry
person may want a hamburger, noodles,
or cheese and bread.
 Demands. When backed by buying
power, wants become demands.
5

Marketing and Sales Concepts
Marketing and Sales Concepts
Contrasted
Contrasted
6
Factory
Existing
Products
Selling
and
Promoting
Profits
through
Volume
The Selling Concept
Starting
Point
Focus Means Ends
Market
Customer
Needs
Integrated
Marketing
Profits
through
Satisfaction
The Marketing Concept

The Four Ps
The Four Ps
9
Marketing
Mix
Product
Price Promotion
Place
(Distribution)

Marketing mix
Marketing mix
The marketing mix is the combination of
variables that a business uses to carry out
its marketing strategy and meet customer
needs.
The marketing mix is often called the 4Ps:
 Product
 Price
 Place
 Promotion

Product
Product
 ‘Product’ refers to the functions and
features of a good or service
 Should satisfy the needs of the customer
 May have a Unique Selling Proposition
(USP)
 ‘Product’ also includes a range of factors
such as packaging, quality, warranties,
after-sales service and branding

Price
Price
The price of a product will depend on:
 The cost to make it
 The amount of profit desired
 Other objectives of the business
 The price competitors charge
 The price customers are willing to pay
◦ Is there a high demand?
◦ Is demand sensitive to changes in price?

Place
Place
 Products should be conveniently available
for customers to buy
 ‘Places’ include:
◦ Stores
◦ Mail order
◦ Telesales
◦ Internet
The use of
e-commerce
(promoting and selling
on the internet) has
grown massively over
the last few years

Promotion
Promotion
The aims of promotion are to:
 Raise awareness
 Encourage sales
 Create or change a brand image
 Maintain market share

The Promotional Mix
The Promotional Mix
 Advertising
 Sales promotion
 Direct Marketing
 Personal selling
 Public relations
15

Product
Product
16
A product is anything that can be offered to satisfy a
need or a want.

Value, Satisfaction, and
Value, Satisfaction, and
Quality
Quality
 Customer value is the difference between
the benefits that the customer gains from
owning and/or using a product and the costs
of obtaining the product.
 Customer satisfaction depends on a
product’s perceived performance in delivering
value relative to a buyer’s expectations.
 Quality begins with customer needs and
ends with customer satisfaction.
17

Exchange, Transactions, and
Exchange, Transactions, and
Relationships
Relationships
 Exchange is the act of obtaining a desired
object from someone by offering something
in return.
 A transaction is marketing’s unit of
measurement and consists of a trade of
values between two parties.
 Relationship marketing builds relationships
with valued customers, distributors, dealers,
and suppliers by promising and consistently
delivering high-quality products, good
service, and fair prices.
18

The Life Time Value of the
The Life Time Value of the
Customer
Customer
 Revenue and profits by average
customer over a lifetime by segment
 Increase average purchase, frequency of
visit, life
19

Example
Example
 Corporate business traveler - 4x a year, 2
nights per visit, $200 per visit = $800 a
year
 Average life is 4 years
 4 yrs x $800 = $3200 lifetime value
20

Markets
Markets
21
A market is a set of actual and potential buyers
who might transact with a seller.

Marketing’s Future
Marketing’s Future
 “It (marketing) encompasses the entire
business. It is the whole business seen
from the point of view of the final result,
that is, from the customer’s point of view.”
 Peter Drucker
 Marketing has become the job of
everyone.
22

The Role of Marketing
The Role of Marketing
in Strategic Planning
in Strategic Planning
23

Strategic Planning
Strategic Planning
24
Strategic planning is the process of developing
and maintaining a feasible fit between
the organization’s objectives, skills, and resources
and its changing marketing opportunities.

Reasons for Planning
Reasons for Planning
 If we do not know where we are going
any road will take us there.
 The essence of strategic planning is the
consideration of current decision
alternatives in the light of their probable
consequence over time.
 The future is unpredictable but it is not
a random walk.
25

Four Organizational Levels
Four Organizational Levels
of Large Corporations
of Large Corporations
26
Corporate SBU Unit Functional

The High-Performance
The High-Performance
Business
Business
27
Processes
Stakeholders
Resources
Organization

Corporate Strategic Planning–
Corporate Strategic Planning–
Four Planning Activities
Four Planning Activities
1. Defining the corporate mission.
2. Establishing strategic business units.
3. Assigning resources to each SBU.
4. Developing growth strategies
28

Defining the corporate mission
Defining the corporate mission
 The mission should define the competitive scopes
within which the company will operate. Industry
scope, products and applications scope,
competencies scope, market-segment scope, and
vertical scope.
 Mission
◦ What business are we in? What businesses should
we be in? What do we do best? What are the
values/ethics of the firm?
◦ Define business by need rather than product.
- Lodging vs hotel
- Quick service restaurants vs fast food hamburgers
◦ Marketing myopia - Transportation vs railroad
29

Corporate Strategic Planning
(cont.)
(cont.)
Assigning resources to each
Assigning resources to each
SBU.
SBU.
•Analytical tools such as the Boston
Consulting Group growth-share matrix are
used to guide.
•Anticipate changes
30

Analyzing Current SBU’s:
Analyzing Current SBU’s:
Boston Consulting Group
Boston Consulting Group
Approach
Approach
31
Question Marks
• High growth, low share
• Build into Stars or phase out
• Require cash to hold
market share
Stars
• High growth & share
• Profit potential
• May need heavy
investment to grow
Cash Cows
• Low growth, high share
• Established, successful
SBU’s
•Produce cash
Dogs
• Low growth & share
• Low profit potential
Relative Market Share
High Low
Market
Growth
Rate
Low
High
?

(cont.)
(cont.)
4. Developing Growth Strategies
◦ Intensive growth opportunities:
Identify further opportunities to achieve
growth within the company’s current
business.
 Market penetration strategy seeks to increase
current products in current markets.
 Market development strategy looks for new
markets in which current products can expand.
 Product development strategy considers new
product possibilities
32

(cont.)
(cont.)
- Diversification growth opportunities:
Identify opportunities to add attractive
businesses that are unrelated to the
company’s current businesses.
Concentric diversification strategy:
Company seeks new products that have
technological and/or marketing synergy
with existing product lines, even though
the product may appeal to a new class of
customers
33

(cont.)
(cont.)
- Horizontal diversification strategy:
Company searches for new products that
could appeal to its current customers
though technologically unrelated to its
current product line.
Conglomerate diversification strategy.
34

(cont.)
(cont.)
- Integrative growth opportunities.
 Backward integration: A hotel company acquiring one
of its suppliers.
 Forward integration: A hotel company acquiring tour
wholesaler or travel agents.
 Horizontal integration: A hotel company acquiring one
or more competitors, provided the government does not
bar the move.
35

Market Expansion Grid
Market Expansion Grid
Developing Growth Strategies in
Developing Growth Strategies in
the Age of Connectedness
the Age of Connectedness
36
1. Market
Penetration
2. Market
Development
3. Product
Development
4. Diversification
Existing
Markets
New
Markets
Existing
Products
New
Products
Ansoff’s Product/ Market Expansion Grid

Business Strategy Planning –
Business Strategy Planning –
Planning at the SBU Level
Planning at the SBU Level
1.Business mission
2.External environment analysis–
opportunities and threats
3.Internal environment analysis–
strengths and weaknesses
4.Goal Formulation (What do we want?)–
The vision
37

Business Strategy Planning
(cont.)
(cont.)
5. Strategy Formulation (How do we get
there?)
- Michael Porter’s three generic types of
strategy:
 Overall cost leadership
 Differentiation
 Focus
◦ Strategic Alliances: companies need to form
strategic alliances with domestic or multinational
companies that complement or leverage their
capabilities and resources to achieve leadership
nationally or globally.
38

(cont.)
(cont.)
6. Program formulation. A company
must develop hiring, training,
advertising, and other programs to
support its strategy.
7. Implementation. A firm must
communicate its strategy to its
employees and it must have the
resources to carry out its strategy.
39

(cont.)
(cont.)
8. Feedback and control are absolutely
necessary to track results and monitor
new developments in the environment.
40

The Marketing
The Marketing
Environment
Environment
41

Chapter 5
Chapter 5
Marketing Information
Marketing Information
Systems
Systems
And
And
Marketing Research
Marketing Research
42

The Marketing Information
System
System
43

System
System
44
Marketing Information System
Developing Information
Information
Analysis
Internal
Databases
Marketing
Research
Marketing
Intelligence
Distributing
Information
Assessing Information
Needs
Marketing Managers
Marketing Environment
Marketing
Decisions
and
Communications

Customer Information
Customer Information
 Comment cards
 Registration-membership
 Disguised/mystery shoppers
 Company records
 Exit interviews
 Follow up phone calls
45

The Marketing Research Process
The Marketing Research Process
46
Defining the
problem and
research
objectives
Developing the
research plan
for collecting
information
Implementing
the research
plan -- collecting
and analyzing
the data
Interpreting
and reporting
the findings

Process
Process
Step 1. Defining the Problem
Step 1. Defining the Problem
& Research Objectives
& Research Objectives
47
Exploratory
Research
Descriptive
Research
Causal
Research
•Test hypotheses about cause-
and-effect relationships.
•Gathers preliminary information
that will help define the problem
and suggest hypotheses.
•Describes things as market
potential for a product or the
demographics and consumers’
attitudes.

Marketing Research
Marketing Research
Process
Process
Step 2. Develop the Research
Step 2. Develop the Research
Plan
Plan
 Research plan development follows these
steps:
◦ Determining Specific Information Needs
◦ Gathering Secondary information
◦ Planning Primary Data Collection
48

Develop the Research Plan
Gathering Secondary
Gathering Secondary
Information
Information
49
Information That
Already Exists
Somewhere.
+ Obtained More
Quickly, Lower Cost.
- Might Not be
Usable Data.
Both Must
Be:
Relevant
Accurate
Current
Impartial
Information
Collected for the
Specific Purpose
at Hand.

Planning Primary Data
Collection
Collection
50
Observational
Research
Gathering data
by observing
people,
actions and
situations
(Exploratory)
Experimental
Research
Using groups
of people to
determine
cause-and-
effect
relationships
(Causal)
Survey
Research
Asking
individuals
about
attitudes,
preferences or
buying
behaviors
(Descriptive)
Research Approaches

Collection
Collection
51
Who is to be
surveyed?
(What Sampling
Unit?)
How many
should be
surveyed?
How should the
sample be
chosen?
Probability or
Non-probability
sampling?
Sample -
representative
segment of the
population
Sampling
Plans

Process
Process
Step 3. Implementing the
Step 3. Implementing the
Research Plan
Research Plan
52
Collecting the
Data
Processing the
Data
Analyzing the
Data
Research Plan

Marketing Research Process
Step 4. Interpreting and
Step 4. Interpreting and
Reporting
Reporting
Findings
Findings
53
Researcher Should Present Important Findings that are Useful in
the Major Decisions Faced by Management.
Step 1. Interpret the Findings
Step 2. Draw Conclusions
Step 3. Report to Management

Environments
Environments
 Internal:various
departments
 Micro: suppliers,
marketing
intermediaries
 Macro: competitive,
demographic,
economic, natural,
technological,
political, and
cultural
54

55
Major Forces in the Company’s Macroenvironment

56
Levels of
Competition
(Adapted from
Analysis for Market
Planning), Donald
R. Lehmann and
Russell S. Winer,
p.22, ©1994 by
Richard D. Irwin

Key Demographic Trends
Key Demographic Trends
57
Changing Age Structure
Population is getting older
Changing Family Structure
Marrying later, fewer children,
working women, and nonfamily households
Geographic Shifts
Moving to the suburbs
Increased Education
Increased college attendance
and white-collar workers
Growing Ethnic and Racial Diversity

Economic Environment
Economic Environment
58
Global Economic
Development
Changes in Income
Changing Consumer
Spending Patterns
Key
Economic
Concerns for
Marketers

Natural
Natural
Environment
Environment
59
Conservation
Of Resources
Ecotourism
Recycle and
Reduce Waste
Factors Affecting
the
Natural
Environment

Technological Environment
Technological Environment
 Robots and machines
 Computerized video checkout services
 Electronic guest room locking systems
 Locking fax machines receive orders at
restaurants
 The development of the Internet
60

Political Environment
Political Environment
61
Increasing
Legislation
Changing
Government
Agency
Enforcement
Includes Laws, Government Agencies, Etc. that Influence
& Limit Organizations/ Individuals in a Given Society
Increased
Emphasis on
Ethics &
Socially
Responsible
Actions

Cultural Environment
Cultural Environment
 Persistence of Cultural Values
 Subcultures
62

Responding to the
Responding to the
Marketing
Marketing
Environment
Environment
Environmental management
perspective
Environmental Scanning
Using information about the
marketing environment
63

Environmental Scanning
Environmental Scanning
64
Determine Environmental Areas That Need
to Be Monitored
Determine How the Information Will Be Collected
Implement the Data Collection Plan
Anaylze and Use the Data in Planning

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