MARKETING MANAGEMENT Prof N B Kanagal

1. MARKETING MANAGEMENT Prof N B Kanagal

2. Principles of Marketing Introduction

3. What is the Marketing Concept

4. Marketing Concept is about satisfying consumer needs and wants simultaneously Meeting organizational objectives There are five types of needs: stated needs: the customer wants an inexpensive car unstated needs: customer expects good service from a dealer real needs : customer wants a low operating cost car, not just a low price secret needs: customer wants to be known as a savvy consumer delight needs: customer wants a navigation system to be installed

5. Marketing Concept is about customer satisfaction Customer Satisfaction Hyundai Launches ‘Hyundai Sonata’ In the untapped Rs.10-20 lakh Segment - acquisition Volvo, Sweden has been very successful in Customer retention, with a repeat purchase Rate of up to 80% over last 40 years. Customer Acquisition Customer Retention Good customer satisfaction is obtained by focusing on both the customer acquisition and customer retention processes.

6. Marketing Concept is about customer satisfaction Customer is also satisfied when they obtain the following a. VALUE b. SERVICE c. QUALITY – Performance, Conformance d. CHOICE

7. Marketing concept is that of exchanges. A transaction is a measured exchange. Contract formalizes a transaction either for the present or for future and Legalizes it if necessary and also provides a recourse in case of a market failure • There are five conditions of exchange • There are at least two parties • Each party has something that might be of value to the other party • Each party is capable of communication and delivery • Each party is free to accept or reject the exchange offer • Each party believes it is appropriate or desirable to deal with other party

8. Marketing Management is Demand Management. Demand represents: - desire and willingness to buy - ability to buy

9. Marketing Management is Demand Management. Eight demand • States are possible • Negative demand – ex-convicts and alcoholics in factories for employment • No Demand – Indian College students in semi-urban areas have no demand for foreign language courses • Latent Demand – Strong latent demand for harmless cigarettes or fuel efficient cars • Declining Demand – for Yamaha in Pianos in 1980s • Irregular Demand - Metro rail demand through the day, seasonality • Full Demand – Organizations sell to maximum capacity • Overfull Demand – Waiting list on Honda Scooters at the dealership • Unwholesome Demand – Hard Drugs

10. Marketing Concept has evolved over six stages • Production concept: It holds that consumers will prefer products that • are widely available and inexpensive • -product concept: Consumers will favor those products that offer the most • quality, performance or innovating features • -selling concept: Consumers do not buy enough, so firms must put in extra • efforts to sell products. • marketing concept: sense the market and respond with offerings – consists of • both reactive and proactive market orientation • holistic marketing concept: Includes dimensions of internal marketing, • development of integrated marketing programs that • cover the 4Ps, relationship marketing that covers • customers, channel and partners and socially • responsible marketing that covers ethics, • environment, legal and community issues.

11. AMA definition : • 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. • Kotler definition : • Human activity directed at satisfying needs and wants through exchange processes

12. Marketing people are in involved in marketing ten types of entities • Goods • Services • Experiences • Events • Persons • Places • Properties • Organizations • Information • Ideas

13. Important Schools of Thought in Mktg - Functional School - Managerial School - Buyer Behavior School - Organizational dynamics school

14. Functional School: Marketing is organized along functions – product management, sales, advertising, market research Managerial School: The marketing that is taught comprising of PLC, marketing mix, market segmentation and positioning. Pioneered by Joel Dean, John Howard, Neil Borden William Lazer, Theodore Levitt, Philip Kotler Buyer Behavioral School: Unwise to target an “Eonomic Man”. Consumer behavior study will lend more depth. Pioneers include Ernest Dichter, John Howard, George Katona, James Engel Organizational Dynamics School: Interorganizational behavior is the key focal point for understanding marketing process.

15. Trends in Marketing

16. Mass customization: This addresses heterogeneity in markets. • e.g. Jenson and Nicholson in paints • Mercedes Benz – choice of design of cars at factory • on order using flexible manufacturing, JIT production • JIT distribution, computer information systems • Provision of supervalue / ecstasy • Airline frequent flyers tied to hotel rentals/ auto rentals • Wants become needs • Today’s power steering option- want is tomorrow’s need • Increasing Brand Proliferation – concept of power brands • Trend towards relationship marketing. CRM. Customer building takes • precedence over classical marketing • 6. Rise of Competition e.g. HLL Pepsodent-Colgate; Computer Industry Rivalry

17. The importance of branding and other intangible assets such as corporate • reputation, intellectual capital. • Requirement of both reactive and proactive market response mechanisms. • Firms should make deliberate attempts to step out of short termism and • look at long term • Societal Marketing more widely practiced. • How to convert niche products to larger markets e.g. mobile phones, • home computers etc. • 12. Globalization

18. CUSTOMER VALUE

19. CUSTOMER DELIVERED VALUE Total Customer Value Total Customer Cost Product Value Monetary Cost Services Value Time Cost | | Personnel Value Energy Cost | | Image Value Psychic Cost Determinants of Customer Delivered Value