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Session - 2

Core Marketing Concepts &

Indian Scenario

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Core Marketing Concepts

Productsand

Services

Value, satisfaction,and quality

Needs, wants,and demands

Exchange, transactions,and relationships

Markets

CoreMarketingConcepts

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What motivates a Consumerto take action?

Needs - state of felt deprivation for basicitems such as food and clothing andcomplex needs such as for belonging.

i.e. I am thirstyWants - form that a human need takes as

shaped by culture and individual

personality. i.e. I want a Coca-Cola.Demands - human wants backed by

buying power. i.e. I have money to buy a

Coca-Cola.

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What Will Satisfy ConsumersNeeds and Wants?

Products - anything thatcan be offered to a

market for attention,

acquisition, use orconsumption and that

might satisfy a need or

want. Examples: persons,

places, organizations,

activities, and ideas.

Services - activities or

benefits offered for sale

that are essentially

intangible and dont result

in the ownership of

anything.

Examples: banking,

airlines, haircuts, and

hotels.

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How do Consumers choose amongProducts and Services?

Customer Value - benefit that thecustomer gains from owning and using a

product compared to the cost of

obtaining the product.

Customer Satisfaction - depends on the

products perceived performance in

delivering value relative to a buyers

expectations.

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How do Consumers obtainProducts and Services?

Exchanges - act of obtaining desiredbenefit(s) from someone by offeringsomething in return.

Transactions - trade of valuesbetween parties. Usually involves

money and a response.Relationships - building long-term

relationships (bond) with consumers,

distributors, dealers, and suppliers.

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How to convey to Consumers aboutProducts and Services?

Marketing Channels: Communication Channelsdeliver and receive messages from

target buyers. e.g. TV, Radio, Billboards, Posters, Internet etc.

Distribution channels: display, sell or deliver the products orservices.

Service channels: Facilitate transactions. e.g. Warehouses,Transportation companies, Banks and insurance companies.

Supply chain: channel stretching from raw materials tothe final buyers.

Marketing Environment: Task environmentcompany, suppliers including services

(like MR agencies, Ad agencies, Banking, Insurance,Transportation Companies etc), distributors, dealers, targetcustomers.

Broad environmentdemographic, economic, technological,

Socio-cultural, political and legal.

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Who PurchasesProducts and Services?

Market - buyerswho share a

particular needor wantthat canbe satisfied by a

companys products

or services.

ActualBuyers

PotentialBuyers

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Modern Marketing System

Suppliers

End User

Market

Marketing

Intermediaries

CompetitorsCompany

(Marketer)

Environme

nt

Environment

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Marketing Management

Marketing Management

Implementing programs to create exchanges with target buyersto achieve organizational goals

Finding and analysing the demand patternand increasing it over time;Changing or reducing demand(e.g. old models of Co.s in Automobile mkt)

Demand Management

Attracting new customers andretaining current customers

Profitable Customer Relationships

Need to understand

To understand and achieve

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EmergingChallenges

NonprofitMarketing

New

Marketingparadigms &InformationTechnology

EthicalConcerns Globalization

Changing

WorldEconomy

New Marketing Challenges

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Marketplace, Marketspace & Metamarkets

Marketplace is physical; Marketspace is virtual

(internet).

Metamarkets: cluster of complementaryproducts and services in the same industry.

E.g. Automobile Co.s, Car dealers, financial

companies, Insurance companies, spare parts dealers,

service shops, auto magazines auto sites over

internet.

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Target Markets, Positioning & Segmentation

Segmentation: based on demographic, psychographic and/or

behavioural similarities/ dissimilarities.

Target Markets: Identifying & profiling distinct group of buyers

prefer varying product/services mixesexamining the Macro-

environment (Demographic, psychographic, and behavioural differencesamong buyers)For SEGMENT(S) company may offer customized or

standardized benefit(s).

Positioning: Offering (value proposition) is suitably/ appropriately

placed in the mind of the customerbased on unique

features/identified gap(s) in the market. E.g. Scorpio launched by

M&M in 2002Sports utility vehicle (SUV)luxury and comfort

(positioning: luxury of a car and adventure of a SUV).

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Demand States Negative demand: consumers dislike the product but still pay for it. (e.g.

Vaccination, dental treatment etc.)

Nonexistent demand: consumer may be unaware or not interested in the

product/ service. (e.g. Pharma retail chains Membership schemes)

Latent demand: consumers may have a strong need- which either may not

be satisfied by existing products or may not have specified. (e.g. Insuranceetc.)

Declining demand: consumer begin to buy the product less frequently. (e.g.ice-creams, cold beverages during Winter)

Irregular demand: consumer purchase very occasionally. (e.g. Cement, WallPaint, electric switches and other appliances etc)

Full demand: consumers are adequately buying all products available in themarket. (e.g. Milk products)

Overfull demand: More consumers would like to buy than the supply. (e.g.Milk pdts. during Shivratri festival)

Unwholesome demand: consumers may be using products that have

undesirable social consequences. (e.g. Cigarettes, Alcoholic drinks etc.)

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Factors influencing Marketing Strategies

PLACE

PROMOTION

PRICE

PRODUCT

TARGET

CUSTOMERS

SUPPLIERS

MARKETING

INTERMEDIARIES PUBLIC

COMPETITORS

Demographic/Economic

Political/

Legal

Social/Cultural

Technological

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Designing a Customer driven

Marketing Strategy

To design a effective marketing strategy,

managers follow two important guidelines:

What customers will we serve?

(target markets)

How can we serve these customers best &better than competitors ?

(value proposition)

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Choosing an appropriate

Value Proposition

Value Proposition: set/ mix of benefits and values, acompany promises to deliver to the customer to satisfy

their needs.

How todifferentiate and

How to position it in the marketplace and market space.

e.g. Value propositions:BMW: the ultimate driving machine

Nokia: Connecting People anyone, anywhere

Apples iPhone: Touching is believing

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Indian Marketing Scenario

Conversion of EPZs into SEZs. Retail and Real Estate boom.

Growth in Medical Insurance & Tourism.

Branding of Tourism (Services).

Demographic changes in India society.

Branding of Commodities

Enhancement in Pharmaceutical value chain.

Jewellary market witnessing more organised

activities.