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• A Professor at one of the IIM's (INDIA) was explaining marketing concepts to the Students:-– 1. You see a gorgeous girl at a party. You go up to her and

say: "I am very rich. Marry me!" - That's Direct Marketing – 2. You're at a party with a bunch of friends and see a

gorgeous girl. One of your friends goes up to her and pointing at you says: "He's very rich. Marry him." - That's Advertising

– 3. You see a gorgeous girl at a party. You go up to her and get her telephone number. The next day, you call and say: "Hi, I'm very rich. Marry me." - That's Telemarketing

About Marketing….

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– 4. You're at a party and see gorgeous girl. You get up and straighten your tie, you walk up to her and pour her a drink, you open the door (of the car) for her, pick up her bag after she drops it, offer her ride and then say: "By the way, I'm rich. Will you marry me?" - That's Public Relations

– 5. You're at a party and see a gorgeous girl. She walks up to you and says: "You are very rich! Can you marry me?" - That's Brand Recognition

– 6. You see a gorgeous girl at a party. You go up to her and say: "I am very rich. Marry me!" She gives you a nice hard slap on your face. - That's Customer Feedback

– 7. You see a gorgeous girl at a party. You go up to her and say: "I am very rich. Marry me!" And she introduces you to her husband. - That's demand and supply gap

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– 8. You see a gorgeous girl at a party. You go up to her and before you say anything, another person comes and tells her: "I'm rich. Will you marry me?" and she goes with him - That's competition eating into your market share

– 9. You see a gorgeous girl at a party. You go up to her and before you say: "I'm rich, Marry me!" your wife arrives. - That's restriction for entering new markets

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Marketing is for Everybody

• TO SHOW THAT MARKETING IS ESSENTIAL• PROVIDE AN UNDERSTANDING OF THE BASIC

MARKETING CONCEPTS

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The Nature of Marketing

• What is the Purpose of Marketing?1.Satisfaction:• Functional Satisfaction • Psychological Satisfaction• The Utility concept

2. Consumer Problems3.Providing Benefit Bundles4..Offering a Total Consumption System

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Simple Marketing System

Industry(a collection

of sellers)

Market(a collection

of Buyers)

Goods/services

Money

Information

Communication

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The Nature of Marketing

• What is the Purpose of Marketing?Satisfaction• Increments of Satisfaction• Facilitating Exchanges

–Conditions for Exchange•Systems of Exchanges

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Evolving Views of Marketing’s Role

The customer as the controllingfunction and marketing as the

integrative function

Customer

Marketing

Production

Human

resources

Finance

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Customers

Front-line people

Middle Management

TopManagement

Traditional Organization Chart

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Customer-Oriented Organization Chart

Customers

Front-line people

Middle management

Topmanage-

ment

Customers Custom

ers

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Core Concepts of Marketing

Product or Offering Value and Satisfaction

Needs, Wants, and Demands

Exchange and Transactions Relationships and Networks

Target Markets & Segmentation

Marketing Channels Supply Chain Competition

Marketing Environment

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Nike Town

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Experiential marketing!?

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Disney Experience!

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Apple Store

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Implications of marketing

• Who are our existing / potential customers?• What are their current / future needs?• How can we satisfy these needs?

• Can we offer a product/ service that the customer would value?

• Can we communicate with our customers?• Can we deliver a competitive product of service?

• Why should customers buy from us?

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The marketing concept

• choosing and targeting appropriate customers

• positioning your offering• interacting with those customers• controlling the marketing effort• continuity of performance

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Evolving Indian Consumer

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The Indian Consumer’s Changing Spending Patterns

Food & Grocery Fuel, Transport & Communication Discretionary Expenditure

Rent, Utilities & Education Savings & Investment

2008 2013

Changing consumer behavior is catalyzing change in spending patterns, freeing up income for discretionary

expenditure

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Emerging Trends

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Shift to Thrift

Redefining Value

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Small WondersSmall Perk Me Up

Products

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‘Mummy ka Magic’Stays Intact

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Eating ‘Out’ at Home

Evolving Home Delivery Model

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Taste Bhi, Health Bhi

A very strong co-relation

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Sattva Foods……..

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Quality Walls’s “MOO” – Calcium Enriched !

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Food On The Go

Instant Pick Me Up

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Eco ConsciousEco ConsciousA light shade of green

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Food As Discovery More Experimenting

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The Food ‘Connect’

Use of Social Media

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POP will remain SupremeThe final test

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The changing Indian consumer

The media explosion.

Increase in disposable income.

The rise of the great Indian middle class

Increase in the number of earning young people

Change in expenditure patterns

Increase in the number of working women38

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Successful marketing requires:

• Profitable

• Offensive (rather than defensive)

• Integrated

• Strategic (is future orientated)

• Effective (gets results)

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Nirma Little Girl!

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“Surf” ad with Lalitaji!

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Lux ad in 1950s!

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Lux Beauty soap with Katrina!

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Mantri Square, B’lore!

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What is Marketing ?

Selling ?

Advertising ?

Any thing more?

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• SOME ISSUES ON MARKETING

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Model of Consumer BehaviorMarketing Mix Stimuli

• Product• Price• Promotions• Advertising•Place

Buyer’s Black Box

??

Psychological•Memory •Perception• Motivation• Personality

Demographics

Environmental• Family•Culture

Buyer’s Responses

• What is purchased?• When, Timing?• How much?• For what use?

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Examples of Buying Motives:Psychological or Functional?

• A senior wants to impress his date at the prom .His primary motive is …?

Psychological

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Examples of Buying Motives:Psychological or Functional?

• A girl wants to remember her grandmother on her birthday.Her primary motive is…?

Psychological

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Examples of Buying Motives:Psychological or Functional?

• A homemaker needs a new washing machine and has had good experiences with Sears.

Her primary motive is …?

Functional

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Examples of Buying Motives:Psychological or Functional?

• A teacher wants to buy a practical car to be used for family transportation.Her/His primary motive is …?

Functional

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Examples of Buying Motives:Psychological or Functional?

• A career woman always buys Liz Claiborne clothes.Her primary motive is…?

Psychological

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Examples of Buying Motives:Psychological or Functional?

• An overweight 40 year old man wants to loose weight so that he can reduce his blood pressure.His primary motive is…?

Functional

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Examples of Buying Motives:Psychological or Functional?

• A homeowner needs to mow their lawn. Their primary motive is…?

Functional

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Consumer Buying Behavior CompetencyFunctional Motive

Psychological Motive

The price is 40 cents off the regular price.It never needs ironing.

Diamonds are forever.Serving you since 1971.

Ninety-day warranty.

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Consumer Buying Behavior Competency

Functional Motive

Psychological Motive

Running shoe with built-in arch.It’s all the rage—colored action wear and style.Wheaties—the breakfast of champions!Steel-belted radial tires warranted for 40,000 milesA watch—a gift she will treasure always.

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What is Marketing ?We use the word Marketing to describe such things as• analyzing the needs of the people• trying to guess what types of products they want• estimate how much they will buy• predict when they want to buy• determine where they go to buy the stuff

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What is Marketing ?

…. And,• figure out the best price to sell it at - and can you still make a profit

selling it at that price• decide on promotional things to create awareness about the product• look at the competition to see what they are doing with pricing,

features etc.

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Marketing is concerned with anticipating consumer demand and directing flow of goods from producers to consumers.

Marketing has to do with matching producers’ outputs to consumers’ inputs [ needs & wants ].

Serving the needs of customers is what business should be all about …

Marketing is the business function that interprets customer needs to the rest of the organization.

Marketing should begin with the customer needs - NOT with the production process. Mkt. should anticipate needs.

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Process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individuals and organizational objectives.

Marketing - the formal definition

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Why should we know about Mkt.?

• Also, Cause,,,,,,,,,,,,,,,,,, marketing people in a company bring in the moneybring in the money - so their jobs are important, so they get paid a lot.

• If you get involved in the marketing side, you are being involved in the INCOME side of the company and your job is very critical (ie. - hard to ever fire you or lay you off)

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The Importance of Marketing

• Why study Marketing - ‘cause you can get a JOB in Marketing !!

• Canada is a very multi-cultural country• We can buy products from all over the world• Selling new products to Canadians requires

new marketing approaches - THEREFORE there will be many new job opportunities

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The Importance of Marketing

• Marketing is a core business discipline• The study of marketing is important to the basics of

running a business, big or small

• When you buy a product - the cost of marketing amounts to 40 ~ 60% of the totaleg. If we buy shoes for Rs.800, Rs.400 of that 800 has been spent on marketing (including advertising, market research, development etc.)

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The Importance of Marketing

Getting a JOB in Marketing !!• Personal selling• Advertising• Package Design• Transportation• Storage• Marketing Research• Product Development• Wholesaling• Retailing

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The Importance of Marketing

Importance to Companies• When you work in the marketing department of a

company you are part of LINE personnel• LINE personnel are always more critical than STAFF

personnel because LINE personnel “bring in the money” - therefore your job is revenue earning, not revenue spending

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Why should we know about Mkt.?

• You can get to be C.E.O. and Chairman of the Board

• “Marketing is often the route to the top”

• Almost always the C.E.O. comes from the V.P. Marketing, not V.P. Human Resources or V.P. Government Relations

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The Importance of Marketing

Getting a JOB in Marketing !!In addition, many people working with NPO’s also

do marketing• Promoting political parties• Cultural groups• Religious organizations• Civic organizations eg. Kiwanas, Shriners• Charitable organizations eg. Red Cross, Salvation

Army

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Marketing

• Marketing is something companies do, and it is also a characteristic of our society

• “It is both a set of activities performed by organizations, and a social process”

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Micro - marketing for a company

Macro - the whole economy

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Micro - marketing for a company, things you do to accomplish the organizations objectives (companies and NPO’s)

Macro - the whole economy and its flow of goods and services from producers to consumers

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Micro - Its not just selling stuff, but also looking at what the customers want

Macro - Looking at how everybody in the country can have access to things they need. Government has to make sure everybody has fair access.

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Micro-Macro Dilemma

• Government has to step in cause not everything would be produced fairly by companies - so regulation needed

• Ex .1: It would be cheaper to make cars without airbags and seatbelts - but Govt. insists they must – so, it has to be done.

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Micro-Macro Dilemma

• Government has to step in cause not everything would be produced fairly by companies - so regulation needed

• Ex. 2: It would be cheaper to make beer cans from raw material cause the price of mineral ore is low - but the Govt. insists a certain % must be recycled to reduce waste and pollution

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The Marketing Functions

BuyingTransportingStoringGradingFinancing Risk TakingInformation Collection Research….

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WHO does the marketing functions ?

From a Macro-point of view• Centrally planned economy (communism)

- its done mostly by the government• Market-direct economy (capitalism)

- its done by various companies, middlemen, brokers etc.

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Innovation is encouraged by a market-directed economy (capitalism) because people who come up with new ideas are free to try and market them and make a fortune. In a communist country, government has strict controls on the “means of production” so there is a limit to what people can manufacture.

In a capitalist economy, people are always trying think of new ways to satisfy un-met needs, and, this encourage new thinking

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A380 - Interior

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Reliance i Pad ( In association with Notion Ink, HYD. )

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Rolls Royce Ghost!

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Advocacy Advertising

• You are not trying to sell a product, you are trying to get people to believe in something, or behave in a certain wayeg.- Don’t drink and drive- Canadian Cancer Society- recycle- use the TTC, save gas

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One of the big complaints about marketing is that ppl act unethical in order to make a sale.

Sometimes it is easy to forget that morals are based on your own cultural standards and in different cultures, people have different opinions about what is ethical.

Eg. Bribery is perfectly acceptable in some parts of Asia and Latin America, but unacceptable in USA and Canada

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Marketing Concept - Social Responsibility

- “improve positive effects on Society and reduce negative effects…”

- environmental problems- social responsibility conflicts with profit

objective(raises ?, is mktg concept desirable)

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Marketing Concept - Social Responsibility

-? Of social responsibility cutting into profits

- some companies have been very successful at dealing with this eg. BODY SHOP

- they realize it is a way to endear themselves to trendy customers

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Marketing Concept - Social Responsibility

-? What if it cuts into profitsAnswer - increasing quality may cost more in

production, but you may make this money back in increased sales which come about as the customers realize you have a very good quality product - this will reduce the advertising costs and customer service/warranty costs and ensure customer satisfaction re: brand loyalty

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Company Orientations Towards the Marketplace

Orientation Description Relative TimeSpan

Basic ManagerialObjective

Production Transition from HomeManufacturing to Factories

IndustrialRevolution

Profit Maximization viaEconomies of Scale

Product &Financial

Focus on Product Development,Performance and Features and

the Growth of Large ScaleIndustrial Empires

Profit MaximizationThrough Superior

Product Performance

Sales Transition from Scarcity ofGoods to Scarcity of Markets;Market Saturation with Basics

Profit Maximization viaDemand Generation

Marketing Transition from Internal(Organization) to External

(Customer) Basis for GuidingMarketing Decisions

1990s Profit Maximization viaMatching of Products to

Customer Wants

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The Marketing Concept

A Customer Orientation

Backed By Integrated Marketing

Aimed at Generating CustomerSatisfaction and Repurchase As The Key To

Satisfying the Organizations Goals

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The Marketing Concept (Contd..)

Focus Means End

Sales Concept Products Selling &Promotion

Profits ThroughSales Volume

MarketingConcept

Customer Needs IntegratedMarketing

Profits ThroughCustomer

Satisfaction

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Stages in Consumer Decision Process

Awareness

Interest

Decision

Satisfaction

Action

Advertising

Channel

Product /Service

Price

Word-of- Mouth

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Cost of Losing and Attracting Customers

• Cost of attracting a new customer can be upto 5 times the cost of keeping a current one happy

• Cost of Offensive Marketing > Cost of Defensive Marketing

• Some companies have increased profits from 25% to 85% by reducing defections by 5%

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Developing An Effective Marketing Plan

• Conduct A Marketing Review• Build A Marketing Strategy• Implement Strategy Via Marketing Mix• Evaluate The Success Of The Marketing Plan

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Conduct A Marketing Review (3-C Analysis)

Opportunity Identification

B. Assessment of COMPANY

Capabilities andCurrent Marketing

Position

A. Analysis ofCUSTOMER

Trends, Needs,Perceptions,

Behavior

C. Analysis ofCOMPETITORSCurrent Position,

Capabilities, Actions

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Build A Marketing Strategy

Generic Strategies ForDIFFERENTIAL ADVANTAGE

* Product Differentiation* Cost Leadership

* Special Market Focus

Selection of TARGET MARKETand Development of a

POSITIONING STATEMENT

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Implementation: The Marketing Mix (Four P’s)

• Product

• Price

• Place

• Promotion

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3C - 4P Framework

• Customer

• Company

• Competitor

• Product

• Price

• Promotion

• Place

ColgateIDSPDA / Infiniti

Sealed-Air

Barco

Nestle

Rohm&Haas

Intel

Dell

BMW

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Marketing System

Short Term Controllable Factors

ProductPlace Price

Promotion

Long Term Factors

Technological

Legal

Socio / Cultural

Economic

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Recasting the 3C - 4P Framework in Value Terms

• Customer

• Company

• Competitor

• Product

• Price

• Place

• Promotion

Creating Value

Capturing Value

Communicating Value

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• The most important aspect of any company’s Marketing concept is identifying its SWOT Analysis.

• What is SWOT analysis?

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SWOT Analysis - Examples

• Example 1 - Wal-Mart SWOT Analysis. Strengths - Wal-Mart is a powerful retail brand. It has a reputation for value for money, convenience and a wide range of products all in one store. Weaknesses - Wal-Mart is the World's largest grocery retailer and control of its empire, despite its IT advantages, could leave it weak in some areas due to the huge span of control. Opportunities - To take over, merge with, or form strategic alliances with other global retailers, focusing on specific markets such as Europe or the Greater China Region. Threats - Being number one means that you are the target of competition, locally and globally.

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• Example 2 - Starbucks SWOT Analysis. Strengths - Starbucks Corporation is a very profitable organization, earning in excess of $600 million in 2004.Weaknesses - Starbucks has a reputation for new product development and creativity. Opportunities - New products and services that can be retailed in their cafes, such as Fair Trade products. Threats - Starbucks is exposed to rises in the cost of coffee and dairy products.

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• Example 3 - Nike SWOT Analysis. Strengths - Nike is a very competitive organization. Phil Knight (Founder and CEO) is often quoted as saying that 'Business is war without bullets. 'Weaknesses - The organization does have a diversified range of sports products. Opportunities - Product development offers Nike many opportunities. Threats - Nike is exposed to the international nature of trade.

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• Example 4 - Indian Premier League (IPL) SWOT Analysis. Where will you find the Mumbai Indians, the Royal Challengers, the Deccan Chargers, the Channai Super Kings, the Delhi Daredevils, the Kings XI Punjab, the Kolkata Knight Riders and the Rajesthan Royals? In the Indian Premier League (IPL) - the most exciting sports franchise that the World has seen in recent years, with seemingly endless marketing opportunities (and strengths, weaknesses and threats of course!).

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• Example 5 - Bharti Airtel SWOT Analysis. Weaknesses - An often cited original weakness is that when the business was started by Sunil Bharti Mittal over 15 years ago, the business has little knowledge and experience of how a cellular telephone system actually worked. So the start-up business had to outsource to industry experts in the field.

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Replaying the Game• P&G: “We sell coffee” vs. “We sell canned coffee of moderate quality in groceries”• The brand we have built to sell mid-tier coffee will not cater to gourmet coffee

position as its made of Robusta rather than Arabica beans. So we need to launch a new brand that preempts the quality position. We may need a new design (DSD), but we’ve done radical stuff before!

• Most restaurants, food chains and institutions sell Coke or Pepsi (branded) but unbranded coffee. Once our gourmet brand is established in grocery stores, we may be able to move into the institutional market (after all, we sell to Wal-Mart!)

• Whole bean provider: Could have built a brand by opening a café division. Took 7 years for Brothers to catch on. By opening the café format, regional whole bean providers could have built brand loyalty. Especially as they do not have P&G’s deep pockets. If the regional whole bean provider launched in 1991, could have built a national brand. By 1994, it was too late.

• Starbucks: May have missed an opportunity by not aggressively expanding via franchising. Region by region rollout gave competitors / imitators time to preempt in certain markets. This way it would have “conquered” the retail business and could have focused more fully on institutional and grocery markets.

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Caselet-1• While entering a developing country like India, MNCs should

consider the factors to which consumers in India are sensitive. One such factor is price. Indian consumers are price sensitive. They always looks for value of money. This explains the success of Nirma washing powder which forced HLL to come out with a low prices detergent Wheel. Also the success of a product depends on the tastes and preferences of customers. Once McDonald’s customized its products according to the tastes and preferences of the Indian customers, it found acceptability in the market. Thus, before entering the Indian market, MNCs should do a proper study of the customers’ tastes and preferences , and this is particularly applicable to food products, because in India, food habits differ from region to region.

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Caselet-2

• During recession, most companies resort to downsizing and cutting costs related to advertising. But advertisement plays a crucial role in creating demand for goods. So it is not advisable to reduce costs related to advertising, rather expenditure on advertisements should increase during a recession. At this time, they build up their brands. If they do so, the companies will be in a competitive position once the recession is over and demand for goods picks up. Brand – building always involves spending on advertisements, packaging etc. Advertising during recession is also advisable because it reminds consumers about the product, and prevents the product from getting erased from consumers’ mind.