Marketing Management (Module 1)
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Marketing is about creating value for customers to benefit the organization and its stakeholders. It involves a set of processes for identifying customer needs and delivering products and services to satisfy those needs profitably. Marketing is not about just selling, advertising, or maximizing profits but rather focusing on developing relationships and meeting customer needs in a way that creates value for both the customer and the company. The key to marketing success is creating value for customers and making them aware of it through effective communication and delivery.
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Marketing Management (Module 1)
- 1. MBA – 104
- 2. What Marketing is Not These Alone…. Selling Advertising Promoting a product Maximising profits Maximising market share Making a customer pay more
- 3. 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
- 4. So… Marketing is… About the customer! A process…. Not an event About creating value Definitely not selling! More about developing relationships with customer All this is ultimately supposed to benefit the shareholders of the company.
- 5. So… Marketing is… CCDV Creation TP Communication Deliver Value Target Customers Profitably
- 6. Marketing… In 3 Words!! Meeting Needs Profitably!!!
- 7. Who is a Marketer? Anyone Seeking a Response Response could be…. A Purchase A Repeat purchase Getting attention Getting a vote Non use of a product Permission for a trip!.......
- 8. Then the Key to Marketing Success is… Creating “Value”…. Making the customers aware of it…. And delivering it to them whenever they seek it…
- 9. But… What is Value??? The sum of the tangible and intangible benefits and costs… You derive benefits from products You pay a cost to acquire and use those products and services….. So you pay a cost to obtain the benefits Value is the your assessment of the relative worth of the benefits from a product as compared to the cost you pay
- 10. What is Value??? Customer Value Perceived Exchange Use Value Value ,
- 11. Perceived Value Perceptions of the customer about the attributes and qualities of the product in relation to his or her needs How well the customer thinks the product will be able to satisfy the specific need he or she is looking to satisfy So…. Perceived Value is customer’s judgment of a product and therefore subjective in nature
- 12. Exchange Value The amount of money realized at the time exchange of the product takes place Exchange value refers to the price you have to pay for acquiring a product So… Exchange value is realized only when the product is sold and is realized by the “seller”
- 13. Exchange & Utility The criteria needed for an exchange to occur: Must have something of value to exchange Need to be able to communicate Must be able to exchange Must want to exchange At least 2 people needed for an exchange to occur There are four types of utility: Form – Production of the good, driven by the marketing function. Place – Make product available where customers will buy the product. Time – Make product available when customers want to buy it Possession – Once you own the product, do what you want with it
- 14. What is the Value Chain? Coordinated series or sequence of functional activities necessary to transform inputs into finished goods or services customers value and want to buy
- 15. A Simple Value Chain
- 16. The Value Chain (VC) & the Firm VC allows alignment of processes with customers. This generates a quality advantage. VC focuses cost management efforts. VC provides for efficient processes which improves the timeliness of operations.
- 17. Value Chain Management Development of a set of functional-level strategies that support a company’s business-level strategy and strengthen its competitive advantage
- 18. Levels of the Value Chain 1. Firm Level • Chain of activities for a firm operating in a specific industry 2. Industry Level • Various processes that are involved in producing goods, starting with raw materials and ending with the delivered product 3. Global Value Chains • Value chain activities to produce goods or services, spread over vast geographic distances
- 19. Firm Level Value Chain Support Activities Logistics Inbound Primary Activities
- 20. Firm Level Value Chain Support Activities Operations Logistics Inbound Primary Activities
- 21. Firm Level Value Chain Support Activities Operations Outbound Logistics Logistics Inbound Primary Activities
- 22. Support Activities Inbound Logistics Operations Outbound Primary Activities Logistics Firm Level Value Chain Marketing & Sales
- 23. Support Activities Inbound Logistics Operations Outbound Primary Activities Logistics Firm Level Value Chain Marketing & Sales Service
- 24. Firm Level Value Chain Support Activities Procurement Service Operations Outbound Marketing Logistics Logistics Inbound & Sales Primary Activities
- 25. Firm Level Value Chain Support Activities Technological Development Procurement Service Operations Outbound Marketing Logistics Logistics Inbound & Sales Primary Activities
- 26. Firm Level Value Chain Support Human Resource Management Activities Technological Development Procurement Service Operations Outbound Marketing Logistics Logistics Inbound & Sales Primary Activities
- 27. Firm Level Value Chain Firm Infrastructure Support Human Resource Management Activities Technological Development Procurement Service Operations Outbound Marketing Logistics Logistics Inbound & Sales Primary Activities
- 28. Firm Level Value Chain Firm Infrastructure Support Human Resource Management Activities Technological Development Procurement Service Operations Outbound Marketing Logistics Logistics Inbound & Sales Primary Activities
- 29. Firm Level Value Chain Firm Infrastructure Support Human Resource Management Activities Technological Development Procurement Service Operations Outbound Marketing Logistics Logistics Inbound & Sales Primary Activities
- 30. What Happens When Value is Added? Cotton Cloth Cotton Cotton Thread Branded Cotton Cotton Shirt Shirt
- 31. What is Customer Satisfaction? Think of an incident in which you were “surprised and delighted” as a satisfied customer. How did that happen? Think of another situation where you were very disappointed as a customer, and you did not return or you told others about your negative experience. How did that happen? Class Discussion
- 32. So… Customer Satisfaction is… So…. Customer Satisfaction is a function of the VALUE of the product which is the consequence of its UTILITY (Use Value) and EXCHANGE (Exchange Value)
- 33. What is Marketing Management? Marketing management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value
- 34. The Beginning of the Marketing Era LL Bean 1912, founded on the marketing concept, in his first circular: "I do not consider a sale complete until goods are worn out and the customer still satisfied. We will thank anyone to return goods that are not perfectly satisfactory... Above all things we wish to avoid having a dissatisfied customer."
- 35. The Beginning of the Marketing Era Peter Drucker, in 1954 said: “If we want to know what business is we must first start with its purpose...There is only one valid definition of business purpose: to create a customer. What business thinks it produces is not of first importance, especially not to the future of the business or to its success. What the customer thinks he or she is buying, what he or she considers "value" is decisive. It determines what a business is, what it produces, and whether it will prosper”
- 36. Where Do We Stand Today??? We are still in the marketing age, but our understanding of what marketing means is changing… So… Some new concepts have been incorporated… Social Responsibility Marketing Holistic Marketing Relationship Marketing Internal Marketing Value Co-Creation Performance Marketing Integrated Marketing Green Marketing
- 37. Marketing Philosophies / Orientations The Production Concept The Product Concept The Selling Concept The Marketing Concept
- 38. Production Orientation Assumes that products that are widely and cheaply available will be preferred Focus is on production efficiency, cost reduction & mass distribution Was the norm with most companies at beginning of this century Today, it is the orientation of companies operating in less developed markets or have chosen to serve “price sensitive” markets in developed markets
- 39. Product Orientation The assumption is that the higher quality product or the product with more or better features will be preferred The focus is on production process, product quality and having an “overall better product than the competitor” Historically, product orientation came after the production dominated philosophy Even today companies operating in non competitive markets or servicing non demanding market segments adopt this philosophy
- 40. The Selling Orientation Assumes that customers will not buy unless “made to buy” or “convinced to buy” Marketing for such an organization would mean aggressive sales and aggressive promotions Historically was the norm after the product concept Now it is a norm with companies that either sell “unsought products” or are unable to adjust their marketing programs to ever changing market realities
- 41. Marketing Orientation Assumes that customer and customers’ needs should be the basis of all efforts by the company Company will value and collect customer intelligence and competitor intelligence too Products, policies and practices will remain “dynamic” and will change either “reactively” or “proactively” Necessary feature of companies operating in competitive markets
- 42. Marketing Tasks Environmental Analysis Formulation of Marketing Strategies Marketing Planning and Implementation Strengthening Customer Relationships Building Strong Brands Communicating and Delivering Value to Customers
- 43. Concepts
- 44. Concepts Core Concepts Need State of felt deprivation Needs, wants, and demands Example: Need food Marketing offers: including products, services and Wants experiences The form of needs as shaped by culture and the individual Value and satisfaction Example: Want a Big Mac Exchange, transactions and relationships Demands Wants which are backed by Markets buying power
- 45. Concepts Core Concepts Marketing offer Combination of Needs, wants, and demands products, services, informa Marketing offers: including tion or experiences that products, services and satisfy a need or want experiences Offer may include Value and satisfaction services, activities, people, places, information or Exchange, transactions and ideas relationships Markets
- 46. Concepts Core Concepts Value Customers form expectations Needs, wants, and demands regarding value Marketing offers: including Marketers must deliver value products, services and to consumers experiences Satisfaction Value and satisfaction A satisfied customer will buy Exchange, transactions and again and tell others about relationships their good experience Markets
- 47. Concepts Core Concepts Exchange The act of obtaining a desired Needs, wants, and demands object from someone by Marketing offers: including offering something in return products, services and One exchange is not the experiences goal, relationships with several Value and satisfaction exchanges are the goal Exchange, transactions and Relationships are built through delivering value and relationships satisfaction Markets
- 48. Concepts Core Concepts Market Set of actual and potential Needs, wants, and demands buyers of a product Marketing offers: including Marketers seek buyers that are products, services and profitable experiences Value and satisfaction Exchange, transactions and relationships Markets