MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that...

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MM SESSION-1, 2 & 3

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Transcript of MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that...

Page 1: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

MM SESSION-1, 2 & 3

Page 2: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

LET’s UNDERSTANDMARKETING

Page 3: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

‘Marketing is the management process that identifies, anticipates

and satisfies customer requirements profitably’

The Chartered Institute of Marketing

What is Marketing?

Page 4: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

‘Marketing is reaching the right product, in the right place, at the right

time, and at the right price’

Adcock et al

Page 5: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

‘Marketing is the human activity directed at satisfying human needs

and wants through an exchange process’

Kotler 1980

Page 6: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

‘Marketing is a social and managerial process by which individuals and groups obtain what they want and

need through creating, offering and exchanging products of value with

others’

Kotler 1991

Page 7: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

• Marketing: “The (1) process of (2) planning and (3) executing the (4) conception, (5) pricing, (6) promotion, and (7) distribution of (8) ideas, (9) goods, and (10) services to create (11) exchanges that (12) satisfy (13) individual and (14) organizational (15) objectives.”

American Marketing Association “official” definition

Page 8: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

ACQUIRING &

RETAINIG CUSTOMERS

Page 9: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Requirements for Marketing to Occur

• 2+ parties– with unsatisfied needs

• Desire and ability to satisfy these needs

• A way to communicate• Something to exchange

Page 10: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

The Marketing Concept

• Focus on finding (or creating) consumer needs and satisfying them—not

– just producing--no guarantee that anyone will buy

Or

– aggressive selling--there is too much competition around

Page 11: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Marketing is Important

Achieves top line

Contributes to society as a whole

Builds strong brands and loyal customers

Decides on the 4 Ps

Meets challenges for sustainability

Page 12: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Marketing is Versatile

Goods

Services

Events

Experiences

Persons

Places

Properties

Organisations

Informations

Ideas

Page 13: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Marketing is Demand Management

NEGATIVE - Change consumer perception, Redesign Mix

NO DEMAND - Connect benefits to need, Generate interest

LATENT - Measure the size of potential market, Develop effective product

FALLING - Creative remarketing, Change the product

IRREGULAR - Use flexible pricing, Promotion

FULL - Maintain

OVERFULL - Use selective de-marketing, Reduce promotion

UNWHOLESOME - Use laws, fear, price hike, reduced availability

Page 14: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

B2C – Brand image, Availability, Communication and Services

B2B – Informed people, Volume, Price, Sales force, Reputation

Global – Adapting, Culture, Quotas, Currency, Political

NGOs & Government – Tender, Volume, Price, Contracts, Quality?

Marketing is Addressing Customers

Page 15: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Some Core Marketing Concepts

Marketplace is physical, as when one goes shopping in a store

Marketspace is digital, as when one goes shopping on the internet

Metamarket a cluster of complementary products & servicesthat are closely related in the minds of customers but arespread across a diverse set of industries

eg. the Automobile Metamarket consists of automobile manufacturers, new car & used car dealers, financing companies, insurance companies, spare partsdealers, service shops, auto magazines, car mechanics etc.

Page 16: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Some Core Marketing Concepts

Needs are basic human requirements

Wants specific satisfiers of need

Demand wants backed by ability and willingness to pay

Page 17: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Stated Needs - Product Demanded: wants an affordable car

Real Needs - Functional Benefit Desired: low maintenance cost

Unstated Needs - Expectation from Company: want good service

Delight Needs - Complimentary Freebies: want insurance, warranty

Secret Needs - Emotional Benefits: Image oriented

Some Core Marketing Concepts

Page 18: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Some Core Marketing Concepts

Segmentation: process of dividing a market into distinct subsets (segments) that behave in the same way or have similar needs

Target Markets: that which presents the greatest opportunity

Positioning: find a slot in the customers mind space

Page 19: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Some Core Marketing Concepts

Product a value proposition, a set of benefits they offer to customers to satisfy their needs

Offering the intangible value proposition that is made physicalthrough a combination of products, services, information, and experiences

Brand is an offering from a known source. A brand carrymany associations in the minds of people. These associations make up the brand image

Page 20: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

The offering will be successful if it delivers value & satisfaction, The buyer chooses between different offerings on the basis of which is perceived to deliver the most value

Value is primarily a combination of Quality, Service & Price(QSP), called the Customer Value Triad

Value increases with quality & service and decreases withprice

Value can be defined as a ratio between what the customergets and what he gives – the customer gets benefits for acost

Some Core Marketing Concepts

Page 21: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Value = Benefits = Functional Benefits + Emotional Benefits

Costs Monetary Cost + Time Cost + Energy Cost + Psychic Cost

The marketer can increase the value of the offering to customers in several ways;

Raise benefitsReduce costsRaise benefits and reduce costsRaise benefits by more than the raise in costsLower benefits by less than the reduction in costs

Some Core Marketing Concepts

P-S-P-I

Page 22: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Perceived Performance = Expectations OK / Satisfied

Perceived Performance < Expectations Dissatisfied / Unhappy

Perceived Performance > Expectations Delighted

Delighted customers have emotional affinity with brand & hence loyalty

Expectation is based on; Past buying experience, Advertisements, Friends, Price, Benchmarking

Some Core Marketing Concepts

Page 23: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

To reach a target market, the marketer uses 3 kinds ofMarketing Channels;

Communication Channels

Distribution Channels

Service Channels

Some Core Marketing Concepts

Page 24: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

While marketing channels connect the marketer to the target buyers, the Supply Chain describes a longer channel stretching from raw materials to final product to final buyers.

When a company moves upstream or downstream, its aim is to capture a higher percentage of Supply Chain value.

Some Core Marketing Concepts

Page 25: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Competition includes all the actual and potential rivalofferings and substitutes that a buyer might consider

There are 4 levels of competition, based on the degree ofproduct substitutability;

Brand Competition other companies offering similar products and services to the same customers

Industry Competition all companies making the same product or class of products

Some Core Marketing Concepts

Page 26: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Form Competition all companies manufacturing products that supply the same service

eg. A car manufacturer will not only compete with other car manufacturers but also against manufacturers of motorcycles, bicycles, trucks etc.

Generic Competition all companies that compete for the same consumer income

eg. A car manufacturer would see itself competing with companies that sell major consumer durables, foreign vacations and new homes.

Some Core Marketing Concepts

Page 27: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Competition represents only one force in the environment inwhich the marketer operates

The other force is Marketing Environment: consists of theTask Environment & the Broad Environment

Task Environment includes the immediate actors involved inproducing, distributing, and promoting the offering. The mainactors are the company, suppliers, distributors, dealers andthe target customers

Broad Environment consists of 6 components; Demographicenvironment, Economic environment, Natural environment,Technological environment, Political-legal environment, andSocio-cultural environment

Some Core Marketing Concepts

Page 28: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Some Core Marketing Concepts

The Marketing Mix is the set of marketing tools the companyuses to pursue its marketing objectives in the target market

The 4 Ps of Marketing

PRODUCT PRICE PROMOTION PLACE

Page 29: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

MARKETING MIX

PRODUCT PRICE PROMOTION PLACE

Product varietyQualityDesignFeaturesBrand namePackagingSizesServicesWarranties

List priceDiscountsCredit termsPayment period

Sales promotionAdvertisingSales forcePublic relationsDirect marketing

Channel typeCoverageLocationsInventoryTransportStorage

Some Core Marketing Concepts

Page 30: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

People Physical Evidence Process

- Employees Facility design - Flow of activities

Recruiting Equipment Standardized

Training Signage Customized

Motivation Employees dress - Number of steps

Rewards - Other tangibles Simple

Teamwork Reports Complex

- Customers Business cards - Customer involvement

Education Statements

Training Guarantees

Some Core Marketing Concepts

Page 31: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Robert Lauterborn propounded that the Sellers 4-Pscorrespond to the Buyers’ 4-Cs

Four PsProductPricePlacePromotion

Four CsCustomer SolutionCustomer CostConvenienceCommunication

“Winning companies will be those that can meet customerNeeds Economically and Conveniently and with Effective

Communication”

Some Core Marketing Concepts

Page 32: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Marketing is Changing…

Information TechnologyGlobalizationDeregulation / LiberalizationIntense competitionRetail Transformation

DisintermediationIncreasing Consumer Buying PowerProliferation of Consumer InformationReducing brand loyaltyCo-creation

Page 33: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Evolution of Company Orientation

PRODUCTION – volume, low cost, easy availability (D>S / Product cost)

(Texas Instruments, Ford, Scooters in 1970s, CD, LCD, RMs,)

PRODUCT - superior products, innovative features (Marketing Myopia / Fallacy of Better Mousetrap)

(Reliance, Nokia, Slide Rule, Bajaj, IBM, LCA, BEST, Post Office, Cameras, Tata TS

Elgin watches, Kevlar, Amazon)

SELLING - aggressive selling and promotion (Over capacity, Push and Make & Sell)

(Insurance, MFs, Pharmaceuticals, Political parties, Housing loans, Commodities)

Page 34: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Evolution of Company Orientation

MARKETING / CUSTOMER - customer focused / centric, more effective than competitors (Sense & Respond / Creating, delivering & communicating superior customer value M-C-C-C-O)

(DuPont, Nestle, HUL, Maruti, Taj Group, ITC)

SOCIETAL - consumer wants, company profits and social welfare (Preserves and enhances consumer’s and society’s well being)

(McDonalds, HUL detergents, CFC free, Body Shop, Aquafina, Jain Irrigation, Energy saving mfg, American autos, Aerated drinks)

Page 35: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

FactoryExistingProducts

Sellingand

Promoting

ProfitsthroughVolume

MarketCustomer

NeedsIntegratedMarketing

Profitsthrough

Satisfaction

The Selling ConceptThe Selling Concept

The Marketing ConceptThe Marketing Concept

StartingPoint

Focus Means Ends

Evolution of Company Orientation

Page 36: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

FactoryExistingProducts

Mfg &Dist.

Efficiency

ProfitsthroughVolume

MarketCustomer

NeedsIntegratedMarketing

Profitsthrough

Satisfaction

The Production ConceptThe Production Concept

The Marketing ConceptThe Marketing Concept

StartingPoint

Focus Means Ends

Page 37: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Internal Marketing

Marketing

Department

Senior

Management

Other

Departments

Performance

Marketing

Holistic

Marketing

Integrated Marketing

Communications

Product &Services

Channels

RelationshipMarketing

Customers Channel Partners Ethics

Environment Legal Community

SalesRevenue

Brand &CustomerEquity

Holistic Marketing Concept

Page 38: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

1. OBSESSED WITH CUSTOMER & AWARE OF COMPETITOR

2. MONITOR UNFULFILLED NEEDS CONTINUOUSLY THROUGH RESEARCH.

3. FUTURISTIC - MARKETING EXPENDITURE AN INVESTMENT

4. MARKETING CULTURE - CUSTOMER OVERRIDES ORGANISATIONAL INTERESTS

5. SPEED IN RESPONSE TO CUSTOMER’S PROBLEMS

6. CONSISTENCY IN DELIVERY OF VALUES, SATISFACTION

7. CUSTOMER RETENTION STRATEGIES

8. INTERACTIVE AND CUSTOMER FRIENDLY DELIVERY SYSTEMS

9. LOOKING AT CONSUMPTION SYSTEM RATHER THAN PRODUCT FOR AUGMENTATION

10. ALL DEPARTMENTS THINK CUSTOMER

11. CUSTOMER SATISFACTION - GOAL

Customer Orientation Means

Page 39: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Tools to Track Customer Satisfaction

• Complaint and suggestion systems• Customer satisfaction surveys• Ghost shopping• Lost customer analysis

• Cautions to be exercised in C.S. surveys

Define what specifics to identify

Manipulation by customers and managers

Page 40: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Customer Development Process

Suspects

PartnersProspects

Rejects

First-timeCustomers

Repeat Customers

Clients Advocates

Page 41: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Low

High

Deg

ree

of In

volv

emen

t

Nature of Customer Relationship

Transactional Collaborative

RepeatCustomers

1st TimeCustomers

Advocates

Clients

Partners

Stages in the Development of Customer Relationship

Page 42: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Life Cycle of Customer Relationship

High CooperationLow Competition

Low CooperationHigh Competition

Time

Pre-RelationshipStage

DevelopmentStage

MaturityStage

SeveranceStage

What should the FOCUS & MAIN ACTIVITIESof a sales person be in each stage of the

Relationship Development Process?

Page 43: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Defining Customer Value

EXCELLENT PRODUCT IS OF NO USE IF IT FAILS TO MEET CUSTOMER NEEDS

A COMPANY SHOULD BE SKILLED IN MARKET ENGINEERING NOT JUST PRODUCT ENGINEERING

Page 44: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Delivering Customer Value

1. MICHAEL PORTER’S GENERIC VALUE CHAIN

2. BENCHMARK AGAINST COMPETITION

Page 45: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Generic Value Chain

PRIMARY ACTIVITIES• Inbound Logistics• Operations• Outbound Logistics• Marketing and Sales• Services

SUPPORT ACTIVITIES• Procurement• Technology development• Human Resource Management• Firm infrastructure

Page 46: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Core Business Process

1. NEW PRODUCT REALIZATION PROCESS

2. INVENTORY MANAGEMENT PROCESS

3. ORDER TO REMITTANCE PROCESS

4. CUSTOMER SERVICE PROCESS

5. CUSTOMER ACQUISITION PROCESS

6. CUSTOMER RELATIONSHIP MANAGEMENT PROCESS

Page 47: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Customer Value Analysis

Identify the major benefits customers value

Assess the quantitative importance of the different benefits

Assess the company’s and competitors performance on the valuesagainst their rated importance

Examine how customers in a specific segment rate the company’sperformance against a specific major competitor on an individual benefit

Monitor customer values over time

VALUE PROPOSITION

VALUE DELIVERY SYSTEM

Page 48: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Customer Profitability Analysis

Profitable Customer

Customer revenue stream > company’s cost stream

Product-Customers-Profitability Analysis

Raise the price of less profitable productsEliminate the less profitable productsSell profitable products to unprofitable customers

ABC

Total revenue from customer LESS all cost incurred by the company

Page 49: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Lifetime Value of Customer

1. Lost customer revenue

2. Lost opportunity revenue

3. Customer replacement costs

Page 50: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Facets of CRM

• Customer needs

• Customer response

• Customer satisfaction

• Customer loyalty

• Reclaiming lost customer

• Customer complaints

• Customer service

DATA MINING & DATABASE MARKETING

Page 51: MM SESSION-1, 2 & 3. LET’s UNDERSTAND MARKETING ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements.

Merci


Chapter 17: Selling Satisfies Custome rs Principles of Marketing Mrs. Piotrowski 1.

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