mktg mgmt-1

8/6/2019 Mktg Mgmt-1

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MARKETING MANAGEMENT

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Introduction to marketing

Social definitionA societal process by which individuals and groups

obtain what they need and want through creating,

offering and freely exchanging products and

services of value with others.

Management definition

It is the process ofplanning and executing the

conception, pricing, promotion and distribution ofideas, goods and services to create exchanges that

satisfy individual and organizational goals.


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Needs, Wants & DemandsNeeds:

A human need is a state of deprivation of some basicsatisfaction. People require food, clothing, shelter, safety,belonging & esteem. These are not created by society ormarketers. They exist in the very texture of human biology

& condition.Wants:

Desires for specific satisfiers of needs. Although needs arefew, wants are many & are continually shaped & reshapedby social forces & institutions.

Demands:

Wants for specific products that are backed by an ability &willingness to buy them. Wants become demand whensupported by purchasing power.


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What is marketed

Goods

Services

Events

Ideas Experiences

Persons

Places

Properties

Organizations Information


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Markets

Consist of all the potential customers sharing aparticular need or want who might be willing &able to engage in exchange to satisfy the need orwant.


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Marketing Concepts

The Production concept:Production marketing concept assume, that buyers want a product thatis available to them on many places, with other words they want to beeasily accessible. They also want it to be as cheap as possible. This

concept makes sense in developing countries like India, China etc. Sowe have two focuses in production concept in marketing:

1. Price

2. Availability

The Product concept:

A firm employing a product orientation is chiefly concerned with thequality of its own product. A firm would also assume that as long as itsproduct was of a high standard, people would buy and consume theproduct.


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Selling vs. Marketing concept

Selling focuses on the needs of the seller,marketing on the needs of the buyer.

Selling is preoccupied with the sellers need to

convert his product into cash, marketing with theidea of satisfying the needs of the customer bymeans of the product & the whole cluster ofthings associated with creating, delivering &

finally consuming it. Selling is push, Marketing is pull.


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Societal Marketing

Societal MarketingConcept holds that the

organizations task is to determine the needs,wants & interests of target markets & to deliverthe desired satisfactions more effectively &efficiently than competitors in a way that

preserves or enhances the consumers &societys well-being.


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Relationship marketing

The aim of Relationship Marketing is to build mutually

satisfying long term relationship with key factors in order to

earn & retain their business. These 4 key

factors/parameters are customers, employees, marketing

partners i.e. channel partners, suppliers & shareholders.


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10

Marketing Functions

ProducersProducers ConsumersConsumers

Financing

Pricing

Marketing-Information Management

Product/Service Management

Promotion

Distribution

Selling


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Marketing Mix

Set of marketing tools that the firm uses topursue its marketing objectives in the targetmarket:

1. Product

2. Price

3. Place

4. Promotion

Also known as the 4 Ps ofMarketing


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Product

Variety

Quality

Design Features

Brand name

Packaging Sizes

Warranties


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Price

List price

Discounts Allowances

Payment period

C

redit terms


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Pricing Strategies

Penetration

Skimming

Competition

PsychologicalPricing is the only mix which generates aturnover for the organisation. The remaining 3ps

are the variable cost for the organisation. It costs

to produce and design a product, it costs to

distribute a product and costs to promote it.

Price must support these elements of the mix.

Pricing is difficult and must reflect supply and

demand relationship.


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Place

Channels

Coverage Locations

Inventory

Transport


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Promotion

Sales promotion

Advertising Sales force

PR

DM


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4Ps vs. 4 Cs

Product Customer needs/wants Price Cost to customer

Place Convenience

Promotion -C

ommunication


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Factors affecting marketing environment


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(A) The micro-environment

This environment influences the organization directly. It includessuppliers that deal directly or indirectly, consumers andcustomers, and other local stakeholders. Micro tends to suggest

small, but this can be misleading. In this context, micro

describes the relationship between firms and the driving forcesthat control this relationship. It is a more local relationship, andthe firm may exercise a degree of influence.


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(B)The macro environment


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PEST Analysis

1. Political Analysis Political stability

Risk of invasion

Legal framework for contract enforcement

IPR protection Trade regulations & tariffs

Anti-trust laws

Pricing regulations

Taxation policy

Wage legislation

Mandatory employee benefits

Industrial safety regulations


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PEST Analysis

3. Social Analysis

Demographics

Class structure Education

Culture

Attitudes Leisure interests


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PEST Analysis

4. Technological Analysis

Recent techno development

Technology impact Impact on cost structure

Rate of techno diffusion (spread of technology)


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(C)The internal environment

All factors that are internal to the organization areknown as the 'internal environment'. They are generallyaudited by applying the 'Five Ms' which areMen,

Money,Machinery,Materials andMarkets. The internalenvironment is as important for managing change asthe external. As marketers we call the process ofmanaging internal change.


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Marketing Planning: The Basics for

Strategy and Tactics

Planning: Process of anticipating futureevents and conditions and of determining the

best way to achieve organizational goals

Marketing planning: Implementing planning

activities devoted to achieving marketing

objectives


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StrategicStrategic Planning versusTactical PlanningPlanning versusTactical Planning

Strategic planning: Process of determining anorganizations primary objectives and adoptingcourses action that will achieve those objectives

Tactical planning: Process that guides theimplementation of activities specified in thestrategic plan.


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Steps in the Marketing Planning

Process


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Defining theMission of the OrganizationDefining theMission of the Organization MissionMission: the essential purpose that differentiates

one company from others

The mission statement specifies the

organizations overall goals and operational scopeand provides general guidelines for futuremanagement actions


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Defining theMission of the OrganizationDefining theMission of the Organization MissionMission: the essential purpose that differentiates

one company from others

The mission statement specifies the

organizations overall goals and operational scopeand provides general guidelines for futuremanagement actions


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Determine Organizational ObjectivesDetermine Organizational Objectives An organization lays out its basic objectives, or

goals, in its mission statement

These objectives in turn guide development of

supporting marketing objectives and plans Well-developed objectives should state specific,

quantitative intentions along with deadlines forachieving them


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Assessing Organizational Resources andAssessing Organizational Resources andEvaluating Environmental Risks andEvaluating Environmental Risks and

OpportunitiesOpportunities

This step involves a back-and-forth assessment

of strengths, risks, and available opportunities.


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Formulating, Implementing, andFormulating, Implementing, and

Monitoring aMarketing StrategyMonitoring aMarketing Strategy Marketing strategy: a firms overall program for

selecting and satisfying a target market

A marketing strategy is aimed at satisfyingconsumers in the selected target market througha careful balance of the elements of the marketingmix each of which represents a subset of theoverall marketing strategy


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Formulating, Implementing, andFormulating, Implementing, and

Monitoring aMarketing StrategyMonitoring aMarketing Strategy Marketing strategy: a firms overall program for

selecting and satisfying a target market

A marketing strategy is aimed at satisfyingconsumers in the selected target market througha careful balance of the elements of the marketingmix each of which represents a subset of theoverall marketing strategy


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Porters 5 forces model


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The BCGMatrixThe BCGMatrix Market Share/Market GrowthMatrixMarket Share/Market GrowthMatrix: a

marketing planning tool that classifies a firms

SBUs or products according to industry growthrates and market shares relative to competingproducts

Stars

CashCows

Dogs

Question Marks

Methods forMarketing Planning


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BCGMarket Share/MarketGrowth Matrix


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Business Portfolio AnalysisBusiness Portfolio Analysis

Strategic Business UnitsStrategic Business Units (SBUs) are key businessunits within diversified firms

A division, product line, or single product may definean SBU

Firms redesign their SBUs as market conditionsdictate


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SBUStrategies

Build:

Objective is to increase the SBUs market share,even forgoing short-term earnings. Appropriate

for question marks whose market shares mustgrow if they are to become stars.

Hold:

Objective is to preserve SBUs market share.Appropriate for strong cash cows if they are tocontinue yielding a large positive cash flow.


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SBUStrategies

Harvest:

Objective is to increase the SBUs short-termcash flow regardless of long-term effect. Involves

a decision to eventually withdraw from abusiness by implementing a program ofcontinuous cost retrenchment.Company plansto milk its business. Hope is to reduce costs at a

faster rate than any potential drop in sales thusincreasing companys cash flow. Appropriate forweak cash cows.


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SBUStrategies

Divest:

Here the objective is to sell or liquidate thebusiness because resources can be better used

elsewhere. Appropriate for dogs & questionmarks that are dragging down companysprofits.

SBUs start as question marks, become stars, thencash cows & finally dogs.


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SWOT Analysis

S Strength

W Weakness O Opportunities

T Threats

Remember - SW are internal, OT are external


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Ansoffs Product-Market Grid

Current products New products

Current Mkts

New Mkts

Mkt penetrationstrategy

Mkt development

strategy

Product developmentstrategy

Diversification

strategy


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Porters Generic Strategies

Overall cost leadership

Product Differentiator

Focus


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