Marketing Management -1

By

Dr. G.MURUGANANTHAM.
(MBA, M.Phil, UGC-NET, Ph.D)
Associate Professor
Department of Management Studies
National Institute of Technology (NIT) - Tiruchirappalli.
MB 704 - MARKETING MANAGEMENT - CONCEPTS AND DESIGN

Unit 1 Introduction
Core concepts of Marketing - Need, Want, Markets, Product vs Services - Evolution
of Marketing Concept - Scanning the Environment - Importance of Marketing.
 
Unit 2 Understanding Consumer
 Factors influencing consumer behaviour - Buying decision process - Organisational
buying - Value creation to consumer, Customer satisfaction - Customer Delight.
 
Unit 3 Market Targeting and Positioning
 Demand - Demand Forecasting Techniques - Segmentation: procedures and
Benefits, Niche Market - Targeting - Positioning: Meaning and strategies.

Unit 4 New Market Offerings

 Meaning of New product - Stages in New Product Development - Product Life
Cycle - Stages - Managing PLC.
Unit 5 Marketing Strategies
 Marketing Planning Process - Marketing Strategies for leaders, followers and
challengers - Marketing interface with other functional areas - Global
Marketing - Trends in Marketing- Relevant case studies.

___________

(First Mover advantage, Differentiation, Competitive advantage)

4Ps
Text Books:
Philip Kotler, Keller, Koshy, Jha, Marketing Management, Pearson, New
Delhi.
Ramaswamy and Namakumari, Marketing Management, MacMillan, New
Delhi.
Rajan Saxena, Marketing Management, TMH, New Delhi.
R.L.Varshney and S.L.Gupta, Marketing Management Indian perspective,
Sultan Chand, New Delhi.
R.S.N.Pillai and Bagavathi, Modern Marketing, S.Chand, New Delhi.

Reference Books:
 Kotler Philip, ‘Marketing Management’, Pearson Education, New Delhi,
 G.Muruganantham, Marketing Dynamics, Aruna Publications, Chennai.
 Michael Etzel, Bruce Walker, William Stanton and Aijay Pandit,
Marketing, Tata McGraw Hill, New Delhi.
 The Marketing White Book, Business world Publication.
Meaning of Management
Management is the process of planning, organising, leading, controlling the
resources of the organisation in an effective manner to achieve the
organisational goals.

Resources - Men, Material, Money, Machines and Methods.

Management is the art of getting things done through and with the people.

Manager

Functional Areas: HRM, Finance, Marketing, Production, Systems, etc.,

Marketing

 Marketing is the process of finding customer needs and serving that needs
profitably.

 Marketing is a societal process by which individuals and groups obtain what

they need and want thro creating, offering and exchanging products and
services of value with others (Philip Kotler).

 Marketing is defined by the American Marketing Association (AMA) as "the

activity, set of institutions, and processes for creating, communicating,
delivering, and exchanging offerings that have value for customers, clients,
partners, and society at large”.
Core concepts in Marketing
Production concept:
Consumer will favour widely available product with low cost.
Profits thro high volume of production. Economies of scale.

Product Concept:
Consumer will favour - quality, performance, innovative features.
Product excellence thro R&D.
Organisation focus on making superior products and improving them over time.

Selling Concept:
Consumers will ordinarily not buy the enough of the organisaions products.
Organisation must undertake an aggressive selling and promotion effort.
Heavy advertising, high power personal selling, large scale sales promotion.
 Effect of open economy –
Marketing opportunities and Challenges
Marketing

What is Marketed?
 Goods
 Services
 Event
 Persons
 Places
 Properties
 Ideas
 Organisation
Marketing vs selling
Selling revolves around the needs of the seller.
Marketing revolves around the needs and interests of the buyer.

Selling seeks to quickly convert products into cash.

Marketing seeks to convert customer needs into products.

Selling views business as a goods producing process.

Marketing views business as a customer satisfying process.

In selling: Cost determines the price.

In Marketing: Consumer determines price. Price determines cost.
Market
 Derived from the Latin word “Marcatus” a place where business is
conducted.
 Market includes both place and region in which buyers and sellers are in
free competition with one another - Pyle.

 The term market refers not to a place, but to a commodity and buyers
and sellers who are in direct competition with one another.

 Market, a means by which the  exchange  of goods and services takes place
as a result of buyers and sellers being in contact with one another, either
directly or through mediating agents or institutions. www.britannica.com
Classification:
1. On the basis of Geo graphical area - Local, National, International.
2. On the basis of volume of business - wholesale, retail.
3. On the basis of economics - perfect (Large B & S, Price uniform, perfect
knowledge, selling homogenous product), Imperfect (Competition is
an economic structure, which does not fulfill the conditions of
the perfect competition, prices not uniform, lack of communication).
http://keydifferences.com/difference-between-perfect-and-imperfect-competition.html

 There are various forms of imperfect competition, which are:

 Monopoly: Single seller dominates the entire market.
 Duopoly: Two sellers share the whole market.
 Oligopoly: Few sellers are there who either act in collusion or competition.
 Monospony: Many sellers and a single buyer.

4. On the basis of regulation - regulated, unregulated.

Read more: http://keydifferences.com/difference-between-perfect-and-imperfect-competition.html#ixzz4GF3jshkx
Product
Need satisfying entity.
Anything that can be offered in a market for use or consumption-
that satisfy need or a want.

Durable goods: Tangible goods used for many years.

Ex. TV, Refrigerator, Washing machine

Non-durable goods: Tangible goods normally consumed in one or

a few uses. Soap, salt, biscuit.,
Demand
Demand is the basis of all productive activities.

A want with three attributes.

1. Desire to buy
2. Willingness to pay
3. Ability to pay ……………effective Demand.

What to produce and how much to produce

Law of Demand:
The demand for a commodity increases when its price decreases and v.v..
Determinants of Market Demand
Price of the product,
Price of the related goods,
Level of consumers income,

Consumer taste and preferences,

Advertisement of the product,
Consumers expectation about future price and supply position,
Demonstration effect,

Consumer credit facility,

Population and
Distribution of national income.
 Environmental Scanning
Demographic Factors : Study of people in terms of their age, gender, location,
population, growth rate, age distribution, literacy level.
Over one billion, 2% per annum, literacy level 65 %.
Marketers are keenly interested in the size and growth of population.

Socio-cultural environment: Customers live in societies.

Social - Attitude, values, lifestyles (Mode of living - way people decide to live their lives )
Social class: Any society is composed of different social classes. A social class is
determined by income, occupation, location of residence.
Each class has its own standards with respect to lifestyle, behaviour.

Cultural: Savings, spending pattern.

India – seven different religious groups, 17 major languages.
People are tradition bound – reflect – family life, marriage and rituals.
Economic environment: GDP, Per capita Income, Inflation, Classification
population.

Political environment: Ruling party, Government - Policy formualtion.

Technological environment: Innovation, Speed of upgradation.

Natural environment: Natural resources-Raw material, Environment,

pollution, Deforestation, Global warming.
Micro Factors in Marketing environment

Suppliers
Distributors
Consumers
Competitors

The company itself (including departments).

http://www.zainbooks.com/books/marketing/principles-of-marketing_11_marketing-
micro-environment.html
Consumer Behaviour

Consumer behavior is the process by which individuals or groups select,

use, or dispose of goods, services, ideas, or experiences to satisfy needs
and wants.

This consumer buying decision process addresses decisions about

 whether to purchase,
 what to purchase,
 when to purchase, Where to purchase
 from whom to purchase,
 and how to pay for it.
Buying Roles

Initiator – A person who first suggests the idea of buying the product
Influencer - A person whose view or advice influence the decision
Decider - A person who makes actual decision
Buyer - A person who makes actual purchase
User – A person who consumes or uses the product or services.
Consumer Decision Making Process

Five stage Model

Problem Recognition

Information search

Evaluation of alternatives

Purchase decision

Post purchase behaviour

Consumer Behaviuor is influenced by
Five factors
1. Personal- Age, occupation, Economic, lifestyle, personality,
self concept- (How one views about himself)
2. Psychological (Motivation, learning, belief, attitudes)
 Learning-change in individual behaviour arising from experience
 Belief-Descriptive thought that a person holds about something
 Attitude - persons favourable or unfavourable evaluation or feeling towards
some object or idea.

3. Cultural Factors
4. Social factors (Family, reference group, social roles, status).

5. Brand - Marketing Programmes.

Purchase Involvement:

 The level of interest the purchase process triggered by the needs to

consider a particular purchase.
 Influenced by the interaction of individual, product and situational
character.
 Temporary state of an individual or household.
High Involvement Purchase

Purchase is closely tied to the consumer’s ego, self-

image and involve some financial, social or
personal risk.
 Different Buying Situations

High Involvement Low involvement

Purchase Decision Purchase decision

Significant Complex Buying Variety Buying

Difference
between Brands Behaviour Behaviour

Few Difference Dissonance Reducing Habitual Buying

between Brands
Buying Behaviour Behaviour
Organisational Buying
 Decision Making process by the organisation by which it select,
evaluate and choose from suppliers.

Characteristics:
Goes through long negotiations several participants in the buying
process
 Fewer buyers
 Larger buyers
 Close supplier-customer relationship
 Derived demand
 Professional purchasing.
Customer satisfaction

 Satisfaction: fulfillment of expectations.

 Persons feelings of pleasure or disappointment resulting from comparing a

product perceived performance.

 Successful firm satisfies the customer by offering him superior value

compared to competing offers.
Customer Delight
 Customer Delight is surprising a customer by exceeding his/her expectations

and thus creating a positive emotional reaction, also called a wow-effect.

This wow-effect leads to word of mouth; a most powerful marketing tool.

 The ultimate goal of delivering Customer Delight is creating a feeling of

belonging, a TINA: There Is No Alternative ( K and R Seth).

 Customer Delight  creates a competitive advantage as it directly affects sales

and profitability of a company by distinguishing it’s brand, products and
services from the competition.

 In order to consistently deliver Customer Delight at all customer touch points

throughout the company, a customer-centric-corporate culture has to be
developed.
 Value creation
Value: Consumers estimate of the products overall capacity to satisfy.
Economic terms – utility. Consumer select a product that offers him the maximum utility for
the money. (Mix of benefits).
Every activity performed by the firm creates some value, which reflects finally in the firm’s
product.

Value is created by combining several elements (performance, reliability, special

characteristics). All 4Ps

Increasing the functionality of the product

Reducing the price
Giving better service support
Offering beneficial communication.

Marketing is a value creating and value delivering process.

Value creation
VFM: While buying a product, a consumer wants value for his money.
What constitutes value will be decided by the customer.

According Kotler, value propositions are built on three value disciplines for
the company.

1) Product leadership - leads to best product value proposition.

2) Operational excellence - best total cost proposition.

3) Customer intimacy – (To provide total best solution) - specific problem of

Customer is identified and its best solution offered.
Demand Forecasting
 Demand forecasting is defined as the action
of approximating
the quantity of a product or service that consumers
will buy.
 Demand forecasting is a prediction or estimation of a future situation,
under given conditions.

 Demand Forecasting - What people say, What people do, What

people have done.

 It involves procedures that include both informal techniques, such as

educated guesses as well as quantitative methods such as the use of
historical sales data.
Methods:
 1. Survey Method
 2. Sales force opinion method
 3. Expert opinion method
 4. Judgment method
 5. Delphi method – survey of expert opinion.
 6. Statistical method: Time series projection methods
a) Simple average b) Trend projection method.
 7. Causal method(Econometric Method)
Degree of association between two variables (sales and ad expenditure)
Cause and effect: offer -> effect.
 Market Demand: for a product is the total volume that would be bought by a
defined customer group in a defined geographical area in a defined time period
in a defined marketing environment.

 Company Demand: What an individual firm can achieve at the maximum in a

given market.
Total market potential:
 Maximum amount of sales that might be available to all the firms in an
industry during a given period.
Q=npq

Q=Total market potential

n=no of buyers in the specific product
q=quantity purchased by an average buyer
p=price of an average unit.

Market share is the proportion of total sales of a product during a stated period
in a specific market that is captured by a single firm.
Segmentation

 Method of dividing a large market into smaller groups of consumers or

organizations.
 Segmentation is dividing a divorce market into a number of smaller, more
similar sub markets.

 Serve the customers more effectively and efficiently.

 Requirements: Measurable, Relevant, Accessible, Profitable.

Methods of Segmentation
 Geographic segmentation: Region, state, district, City, urban/rural
 Demographic segmentation: Age, Gender/sex, marital status, family size,
Religion, income, educational qualification.

 Psychographic segmentation: Socioeconomic classification, Personality

traits, Values, lifestyles.
 Behavioural Segmentation:
Usage rate: Heavy users, light users, non-users.
Users / user status:
Occasions: Regular, special
Benefits: Desired-cost, Q, operating life
Readiness stage:
Brand loyalty: totally brand loyal. Brand switchers ,, no loyalty.
Brand Positioning
A Brand’s position is about building an image in the
prospects mind.

Kotler aptly defines “positioning as the act of designing the

company’s offering and image to occupy a meaningful
and distinct position in the mind of the target customers”.

A brands position is the complex set of perceptions,

impressions and feelings that the consumer associates
with the brand as compared with competing brands.