What is Marketing…??

Selling?
Advertising?
Promotions?
Making products available in stores?
Maintaining inventories?

All of the above, plus much more!

1
Marketing = ?

Marketing is the process of planning and executing the

conception, pricing, promotion, and distribution of ideas,
goods, services to create exchanges that satisfy
individual and organizational goals
American Marketing Association

2
 Marketing = ?

Marketing management is the art and science of

choosing target markets and getting, keeping, and
growing customers through creating, delivering, and
communicating superior customer value.

3
 Simple Marketing System
Communication

Goods/services
Industr y Market
(a collection (a collection
of sellers) of Buyers)
Money

Information 4
 Marketing = ?
 Marketing is the sum of all activities that take you to a
sales outlet. After that sales takes over.
 Marketing is all about creating a pull, sales is all about
push.
 Marketing is all about managing the four P’s –
 product
 price
 place
 promotion

5
What Is Marketing?

Simple definition:
Marketing is the management process
responsible for identifying, anticipating, and
satisfying customer requirements profitably.”
(CIM,2001)

Goals:
4. Attract new customers by promising superior
value.
5. Keep and grow current customers by delivering
satisfaction.
Marketing Defined

• Marketing is the activity, set of

instructions, and processes for creating,
communicating, delivering, and
exchanging offerings that have value for
customers, clients, partners, and society
at large.
OLD view of NEW view of
marketing: marketing:

Making a sale Satisfying

—“telling and customer needs
selling”
Why is Marketing
Important?

Shifting Business Paradigms

Buyers’ markets
Sellers’ markets
 The 4 Ps & 4Cs

Marketing Convenience
Mix

Place
Product

Customer
Solution Price Promotion

Customer Communication
Cost
9
 Difference Between - Sales &
Marketing ?

Sales
trying to get the customer to want what the
company produces
Marketing
trying to get the company produce what
the customer wants

10
Scope – What do we market
 Goods
 Services
 Events
 Experiences
 Personalities
 Place
 Organizations
 Properties
 Information
 Ideas and concepts

11
 Core Concepts of
Marketing

Based on :
 Needs, Wants, Desires / demand

 Products, Utility, Value & Satisfaction

 Exchange, Transactions & Relationships
 Markets, Marketing & Marketers.

12
 Core Concepts of Marketing

Needs, wants Utility, Value &

Products
demands Satisfaction

Marketing & Xchange, Transaction

Markets
Marketers Relationships

13
Core Concepts of Marketing

 Need – food ( is a must )

 Want – Pizza, Burger, French fry's ( translation of a need
as per our experience )
 Demand – Burger ( translation of a want as per our
willingness and ability to buy )
 Desire – Have a Burger in a five star hotel

14
 Needs, Wants, and Demands

Need: State of felt deprivation including physical,

social, and individual needs.
• Physical needs: Food, clothing, shelter, safety
• Social needs: Belonging, affection
• Individual needs: Learning, knowledge, self-
expression
Want: Form that a human need takes, as
shaped by culture and individual
personality.

• Wants + Buying Power = Demand

In order to understand Marketing let us begin
with the Marketing Triangle

Customers

Company Competition

16
Who is a Customer ??

CUSTOMER IS . . . . .

Anyone who is in the market looking at a product /

service for attention, acquisition, use or consumption
that satisfies a want or a need

17
Customer –

CUSTOMER has needs, wants, demands and

desires
Understanding these needs is starting point of the
entire marketing
These needs, wants …… arise within a framework
or an ecosystem
Understanding both the needs and the ecosystem is
the starting point of a long term relationship

18
 How Do Consumers Choose Among
Products & Services?

Value - the value or benefits the customers gain from

using the product versus the cost of obtaining the
product.
Satisfaction - Based on a comparison of performance
and expectations.
 Performance > Expectations => Satisfaction
 Performance < Expectations => Dissatisfaction

19
Customers - Problem
Solution

As a priority , we must bring to our customers

“WHAT THEY NEED”
We must be in a position to UNDERSTAND their
problems
Or in a new situation to give them a chance to AVOID
the problems

20
 Customer looks for Value
Value = Benefit / Cost
Benefit = Functional Benefit + Emotional
Benefit
Cost = Monetary Cost + Time Cost +
Energy Cost + Psychic Cost

21
 Analysis Of Competition
Who are your competitors?
What are their strengths and weaknesses?
What have been their strategies?
How are they likely to respond to your
Marketing plan?

22
The Marketing Process

A simple model of the marketing process:

• Understand the marketplace and customer
needs and wants.
• Design a customer-driven marketing
strategy.
• Construct an integrated marketing
program that delivers superior value.
• Build profitable relationships and create
customer delight.
• Capture value from customers to create
profits and customer quality.
Marketing Management

Marketing managers must consider the following, to

ensure a successful marketing strategy:
2. What customers will we serve?
— What is our target market?
3. How can we best serve these
customers?
— What is our value proposition?
Choosing a Value
Proposition

The set of benefits or values a company

promises to deliver to consumers to satisfy
their needs.
• Value propositions dictate how firms will
differentiate and position their brands in
the marketplace.
The Marketing Concept

The marketing concept:

• A marketing management philosophy that
holds that achieving organizational goals
depends on knowing the needs and wants
of target markets and delivering the
desired satisfaction better than
competitors.
Customer Perceived Value

Customer perceived value:

“Customer’s evaluation of the difference
between all of the benefits and all of the
costs of a marketing offer relative to
those of competing offers.” (Armstrong
& Kotler)
 Perceptions may be subjective
 Consumers often do not objectively
judge values and costs.
Customer value = perceived benefits – perceived
sacrifice.
The Marketing Mix

The set of controllable, tactical marketing tools that

the firm blends to produce the response it wants in
the target market.
• Product: Variety, features, brand name, quality,
design, packaging, and services.
• Price: List price, discounts, allowances, payment
period, and credit terms.
• Place: Distribution channels, coverage, logistics,
locations, transportation, assortments, and
inventory.
• Promotion: Advertising, sales promotion, public
relations, and personal selling.
Customer-Driven Marketing Strategy
Requires careful customer analysis.
To be successful, firms must engage in:
• Market segmentation
• Market targeting
• Differentiation
• Positioning
Market Segmentation and Targeting
Segmentation:
• The process of dividing a market into
distinct groups of buyers with different
needs, characteristics, or behavior who
might require separate products of
marketing programs.
Targeting:
• Involves evaluating each market segment’s
attractiveness and selecting one or more
segments to enter.
Differentiation and Positioning
Differentiation:
• Creating superior customer value by
actually differentiating the market offering.
Positioning:
• Arranging for a product to occupy a clear,
distinctive, and desirable place relative to
competing products in the minds of target
consumers.
Market Segmentation

Key segmenting variables:

• Geographic
• Demographic
• Psychographic
• Behavioral

Different segments desire different benefits from

products.
Best to use multivariable segmentation bases in
order to identify smaller, better-defined target
groups.
Market Segmentation

Why Segment?:
• Meet consumer needs more precisely
• Increase profits
• Segment leadership
• Retain customers
• Focus marketing
communications
Evaluating Market Segments

Segment size and growth:

• Analyze current segment sales, growth rates,
and expected profitability.
Segment structural attractiveness:
• Consider competition, existence of substitute
products, and the power of buyers and
suppliers.
Company objectives and resources:
• Examine company skills and resources needed
to succeed in that segment.
• Offer superior value and gain advantages over
competitors.
Market Targeting

Market targeting involves:

• Evaluating marketing segments.
Segment size, segment structural attractiveness,
and company objectives
and resources are considered.
• Selecting target market segments.
Alternatives range from undifferentiated
marketing to micromarketing.
• Being socially responsible.
Differentiation and
Positioning

A product’s position is:

• The way the product is defined by
consumers on important attributes—the
place the product occupies in consumers’
minds relative to competing products.
• Perceptual positioning maps can help
define a brand’s position relative to
competitors.
Differentiation and
Positioning

Identifying possible value differences and

competitive advantages:
• Key to winning target customers is to
understand their needs better than
competitors do and to deliver more value.
Competitive advantage:
• Extent to which a company can position
itself as providing superior value.
Achieved via differentiation.
Strategic Marketing

Strategic marketing management is concerned with

how we will create value for the customer
Asks two main questions
 What is the organization’s main activity at a
particular time? – Customer Value
 What are its primary goals and how will these be
achieved? – how will this value be delivered

38
Strategic Planning

Strategic Planning is the managerial process of

creating and maintaining a fit between the
organization’s objectives and resources and the
evolving market opportunities.

 Also called Strategic Management Process

 All organizations have this
 Can be Formal or Informal

39
The Strategic-Planning, Implementation,
and Control Process

40
 Business Strategic-Planning
Process
External environment
(Opportunity &
Threat analysis)

Business Mission Goal Formulation

Internal Environment

(Strength/ Weakness analysis)

41
Strategy Formulation
Environmental Analysis

Competitor Internal Analysis

Customer
Supplier Technology Know-How
Regulatory Manufacturing Know-How
Social/ Political Marketing Know-How
Distribution Know-How
Logistics
Opportunities & Threats
Strength & Weaknesses

Identity Core Competencies

Identify opportunity

Fit internal Competencies with external opportunities

42
Firm Strategies
The Marketing Plan

A written document that acts as a guidebook of

marketing activities for the marketing manager

43
CONTENTS of MARKETING PLAN
Business Mission Statement
Objectives
Situation Analysis (SWOT)
Marketing Strategy
 Target Market Strategy
 Marketing Mix
 Positioning
 Product
 Promotion
 Price
 Place – Distribution
 People
 Process
Implementation, Evaluation and Control

44
The Marketing Process

Business
Mission
Stateme
nt

Objectiv
es

Situation
or SWOT
Analysis

Marketing Strategy
Target Market
Strategy

Marketing Mix
Product Place/Distribution

Promotion Price

Implementation
Evaluation,
Control 45
 Why a product like radio
declined and now once again
emerging as an entertainment
medium ?

46
What Were the Drivers of This Change ?

Technology ?

Government policy ?

Other media substitutes ?

47
Why Market Leaders
Suffered ?
 HMT vs. Titan
 HLL vs. Nirma
 Bajaj vs. Honda
 Dot.com boom, then bust and now resurgence
 Market leadership today cannot be taken for
granted.New and more efficient companies are able
to upstage leaders in a much shorter period.

48
Factors
Influencing
Company’s
Marketing
Strategy

49
 External Marketing Environment
External Environment
Social Ever-Changing
is not controllable Change Marketplace
Demographics

Economic
Product Physical / Natural Conditions
Distribution
Promotion
Price
Competition
Target Market
Political &
Legal Factors
Technology
Environmental
Scanning

50
The macro-environment

is the assessment of the external forces that act upon the

firm and its customers, that create threats & opportunities

51
 Product is . . . . .

Anything that is offered to the market for

attention, acquisition, use or consumption that
satisfies a want or a need

52
Types of Products

PRODUCTS

Consumer Industrial
Services
Products Products

53
Product Items, Lines, and Mixes

A specific version of a product

that can be designated as a
Product Item
distinct offering among an
organization’s products.

A group of closely-related
Product Line
product items.

All products that an

Product Mix
organization sells.

54
Product Mix

Width – how many product lines a company has

Length – how many products are there in a product line

Depth – how many variants of each product exist within a

product line

Consistency – how closely related the product lines are in

end use

55
Gillette’s Product Lines & Mix

Width of the product mix

Depth of the product lines

Blades and Writing

razors Toiletries instruments Lighters
Fusion – 5 blade
Mach 3 Turbo
Mach 3 Series Paper Mate Cricket
Sensor Adorn Flair S.T. Dupont
Trac II Toni S.T. Dupont
Atra Right Guard
Swivel Silkience
Double-Edge Soft and Dri
Lady Gillette Foamy
Super Speed Dry Look
Twin Injector Dry Idea
Techmatic Brush Plus

56
What is a Service?
Defining the Essence

An act or performance offered by one party to another

(performances are intangible, but may involve use of
physical products)

An economic activity that does not result in ownership

A process that creates benefits by facilitating a desired

change in customers themselves, or their physical
possessions, or intangible assets

57
Some Industries - Service
Sector

Banking, stock broking Health care

Lodging Education
Restaurants, bars, Wholesaling and retailing
catering Laundries, dry-cleaning
Insurance Repair and maintenance
News and entertainment Professional (e.g., law,
architecture, consulting)
Transportation (freight and
passenger)

58
Classification of Services
Pure Intangible
Banking
Service

Good Transportation

Major Service with

Minor Product
Business Hotels
Product = Service

Computers

Major Product with

Minor Services
Materials / Components

Pure Tangible Product

59
Major Characteristic of Services

 Intangibility – Services are intangibility cannot be seen,

tasted, felt, heard or smelled before purchase.
 Inseparability - Services are produced and consumed
simultaneously.
 Variability or Heterogeneity – Services are highly variable
 Perishability – Services cannot be stored.
 Non Ownership - Services are rendered but there is no
transfer of title

60
The Marketing Mix

The conventional view of the marketing mix consisted of

four components (4 Ps): Product, Price, Place/
distribution and Promotion.
Generally acknowledged that this is too narrow today;
now includes , Processes, Productivity [technology ]
People [employees], Physical evidence
Marketers today are focused on virtually all aspects of
the firm’s operations that have the potential to affect
the relationship with customers.

61
The “8Ps” of Integrated Service
Management vs. the Traditional
“4Ps”
► Product elements
► Place, cyberspace, and time
► Process
► Productivity and quality
► People
► Promotion and education
► Physical evidence
► Price and other user outlays

62
The Give and Get of Marketing

63
Great Words on Marketing
• “The purpose of a company is ‘to create a customer…The only
profit center is the customer.’”
• “A business has two—and only two—basic functions: marketing
and innovation. Marketing and innovation produce results: all the
rest are costs.”
• “The aim of marketing is to make selling unnecessary.”
• “While great devices are invented in the Laboratory, great
products are invented in the Marketing department.”
• “Marketing is too important to be left to the marketing
department.”

64
Drivers of Customer Satisfaction
Many aspects of the firm’s value proposition contribute
to customer satisfaction:
 The core product or service offered
 Support services and systems
 The technical performance of the firm
 Interaction with the firm and it employees
 The emotional connection with customers

Ability to add value and to differentiate as a firm focuses

more on the top levels

65
Marketers and Markets
Marketers are focused on stimulating
exchanges with customers who make
up markets – B2C or B2B.
The market is comprised people who
play a series of roles: decision
makers, consumers, purchasers,
and influencers.
It is absolutely essential that marketers
have a detailed understanding of
consumers, their needs and wants.
Much happens before and after the sale
to affect customer satisfaction

66
Stages of Customer Interaction

67
What Changed in Marketing…

Old Economy New Economy

• Organize by product units • Organize by customer segments

• Focus on profitable transactions • Focus on customer lifetime value
• Look primarily at financial • Look also at marketing scorecard
scorecard
• Focus on shareholders • Focus on stakeholders
• Marketing does the marketing • Everyone does the marketing
• Build brands through advertising • Build brands through performance
• Focus on customer acquisition • Focus on customer retention
• No customer satisfaction • Measure customer satisfaction and
measurement retention rate
• Over-promise, under-deliver • Under-promise, over-deliver

68
 Are Banks truly
marketing-savvy and
customer - centric?

69
Myth 1 – The larger the range of products, the
more customer-centric I am.

Mythbuster – The range of products has

emerged from being
competition-centric.

70
Myth 2 – Better technology (read CRM) leads to
better customer service.

Mythbuster – Technology
alone does not deliver,
helps people do.

71
Myth 3 – Launch a product and the customer will
start
using instantly.
- Give a customer a card and he will learn how to play
with it immediately

Mythbuster – Customers need

To be educated too…

72
Myth 4 – The only way to get a customer is
from
competition.

Mythbuster – Customers
are not only present
where competition is.

73
Myth 5 – Just advertise and - You will sell.

Mythbuster – Advertising will only sell,

Not retain customers.
74
Myth 6 – No difference between marketing &
selling

Mythbuster – “Selling focuses on the needs of the

seller; marketing on the needs of the buyer.

75
Myth 7 – In the absence of relationships ‘trust’
builds financial brands

Mythbuster – Trust is not a differentiator at all…

it is the very minimum that the customer expects!!

76
So what will the differentiators be :

• Technology ?

• Brand ?

77
The real differentiator of
customer – centricity in a
commoditised world of
financial products -
Customer Service !

78