LO1:

UNDERSTAND THE CONCEPT

AND PROCESS OF
MARKETING
DEVELOPED AND PRESENTED BY:
SANDEEP SINGH SIKERWAR
ASSOCIATE PROFESSOR
MALDIVES BUSINESS SCHOOL,
MAL, MALDIVES .

POINTS TO BE COVERED

Marketing
Elements of Marketing

Marketing Mix
Marketing Audit
SWOT Analysis
Integrated Marketing
Relationship Marketing

Marketing Philosophies

MARKETING

TERM MARKETING

DEFINITION
An organizational function and a
set of processes for creating,
communicating and delivering
value to customers and for
managing customer relationships in
a way that benefits the
organization and its stake holders.
(American Marketing Association )

The management process

responsible for identifying,
anticipating and satisfying
customer
requirements
profitably.
(Charted
Institute
of
Marketing)

ELEMENTS OF MARKETING
Marketing
Mix

Relationship
marketing

Marketing
Audit

Marketing
Elements

Integrated
Marketing

SWOT
Analysis

1. MARKETING MIX

PROMOTION

PLACE

PRODUCT

PRICE

PROCESS

PEOPLE

PHYSICAL
EVIDENCE

 Special offers
Advertising
User trials
Endorsement
Direct Mailing
Posters/Leaflets
Free gifts

Price

Wholesale
Retail
Internet
Mail order
Direct Sales
Peer to Peer
Multi channel

Promotion

Design
Technology
Usefulness
Convenience
Value
Quality
Packaging
Branding
Accessories
Warranties

Place

Product

MARKETING MIX

Skimming
Penetration
Psychological
Cost Plus
Loss Leader

EXTENDED MARKETING MIX

People

Employees
Management
Culture
Customer service

Physical Evidence

Smart
Interface
Comfort
Facilities

Process

Specifically for
service industry.
How services are
delivered and
consumed?
User friendly
process.

Not simply what an organization produces: it is what the consumer

buys.

We need to appreciate the difference between product features and

consumer benefits.
3 main aspects of a product: The Physical aspect ( Also known as actual product)
The Functional aspect ( Also known as Core Product)
Augmented Product (Wider benefits of the product)

Product range: Width

Depth

Cost
(Variable Cost +
Fixed Cost)

Competitors Price

Influences
on Pricing
Consumer
Perception

Market Conditions

 Price for
products and
services is set
artificially low in
order to gain
market share.
Later on, once
market is
gained, prices
are increased.
Eg. Satellite TV
connection.

Psychological Pricing

Company
charge a higher
price in starting
phase.
Due to
competition,
later on they
decrease the
price.
Eg. Iphone
Pricing.

Penetration pricing

Skimming pricing

PRICING STRATEGIES

Use to target
the customers on
emotional basis
than rational
basis.
Eg. 99 cents,
1.99 Rufiya, etc.

 An aggressive
pricing strategy.
Stores selling the
goods either at
or below cost.
Assumption:
Attracting
customer on low
price, and they
tend to purchase
other higher
price products.
Eg. Grocery
Stores.

Premium Pricing

Cost-based
method for
setting
the prices.
Direct cost plus
profit margin.
Eg. Vegetables.

Loss-Leader Pricing

Cost-Plus Pricing

PRICING STRATEGIES

High price where

there is a
unique brand.
Usually in
monopolistic
market or where
company have
substantial
competitive
advantage.
Eg. Swiss
watches.

Contact is a key element of the marketing process.

Rely on third parties known as middlemen.
They provide distribution channels.

Types of middlemen: Merchants ( Sells the goods to wholesalers and retailers)

Agents and Brokers ( Assist in transferring of goods)

Use of information technology in distribution system.

Sales
Promotion

Advertising

Ingredients of
Promotional
Mix

Personal
Selling

Public
Relations

MEASURING THE IMPACT

The number of people seeing a particular advertisement is measured
by extensive surveys.

Direct mail offers the key benefit of reaching consumers precisely.

Publicity, measuring the amount of media exposure gained.

Personal visits, seeing which staff bring in the business.

Sales promotional activities, information collection using barcodes on
money-off coupons.

SERVICES

Any activity or benefit offered by one party to another

which is essentially intangible and does not result in the
ownership of anything physical.
(BPP Learning Media)

Inseparability

Intangibility

Inconsistence

Inventory
(storing)

Involvement
(customization)

Suffer from the intangible nature

of the offering.

Using devices such as newsletters

(often via e-mail) to maintain the
customer's

desire

to

have

the

service.

Letter of Certification, Recognition,

etc.

User-friendly systems
for selling and buying.

To operate efficiently,
customers should not
face any unnecessary
bureaucracy or delay.
Information technology
and the widespread use
of computers have
made the things easier.

PEOPLE

Variability and inseparability,

people who are an integral
part of the process.
Poorly motivated or badly
trained, this can greatly affect
the quality of the service.

2. MARKETING AUDIT

A comprehensive, systematic, independent and periodic

examination of companys marketing environment,
objectives, strategies and activities with a view of
determining problem areas and opportunities and
recommending a plan of action to improve the companys
marketing performance.
(Kotler and Keller, 2007)

FOUR COMPONENTS OF
MARKETING AUDIT
Integrated
Covers all
activities of the
organization in
marketing
Detection of
problems and
failures in
effective
marketing.

Systematic
Presents an
ordered
sequence of
steps
Enterprise
marketing
environment,
internal
marketing system
and marketing
activities.
Action plan and
recommendations
.

(SILVIA KLINEKOV JARMILA ALGOVIOV, 2014)

Independent
Carried out by
independent
experts called
Marketing
Auditors
Brings benefits
of higher
flexibility,
objectivity,
independence
and wider
utilizing of
experience.

Periodic
Carried out
regularly.
Serves as a
prevention and
maintain
organization in a
favorable
position in the
market.

WHAT TO BE AUDITED
Both macro
environment and
task environment

Consistency of
marketing strategy
with environmental
opportunities and
threats

Assess the
interactions
between the
marketing and the
sales organization.

Marketing
environment

Marketing
strategy

Marketing
department

Evaluate
procedures used to
obtain information,
plan and control
marketing
operations

Accounting data to
determine optimal
sources of profits,
as well as potential
cost savings.

Reviewing key
marketing functions
based primarily on
prior audit findings

Marketing
systems

Productivity
audit

Marketing
function

(Kotler, 1977, In Morgan & Clark & Gooner, 2002)

COMPONENTS OF INTERNAL AND

EXTERNAL AUDIT

Business and
economy
environment
Economy

The Market

Sales

Marketing

Size

Total sales and

revenue

Procedures

Characteristics
Fiscal

Geographic reach
and locations

Trends
Type of industry

Social

Channels
Customers

Technological

Organizations

Industry behaviors

By product
By customer

Information Mix

TOP 10 FACTORS TO BE ASSESSED BY

MARKETING AUDIT
Key factors that impacted the during the year.
Customer satisfaction scores and the number and type of customer
complaints.
The satisfaction levels of distributors, retailers, and other value chain
members.
The marketing knowledge, attitudes, and satisfaction of all
executives involved in the marketing function.
The extent to which the marketing program was marketed internally
and bought into by top managers and non-marketing executives.

TOP 10 FACTORS TO BE ASSESSED BY

MARKETING AUDIT
The offering: Did it meet the customers needs as expected, and was the
offerings competitive advantage defensible?
The performance of the organizations advertising, promotion, sales,
marketing, and research programs with an emphasis on their return on the
money invested in them.
Whether the marketing plan achieved its stated financial and nonfinancial
goals.
Whether the individual elements of the marketing plan achieved their stated
financial and nonfinancial goals.
The current value of the brand and customer equity for each brand in the
product portfolio.

SWOT ANALYSIS
It is based on situational analysis.
SWOT analysis: S- Strength, W- Weakness, O-opportunities, T- Threats.
Strength:
Internal capabilities, resources, and positive situational factors.

Weakness:
Internal limitations and negative situational factors.

Opportunities:
Favorable factors or trends in the external environment.

Threats:
Unfavorable external factors or trends

External

Internal

SWOT ANALYSIS
Strengths

Weaknesses

Internal capabilities that

may help the company
reach its objectives.

Internal limitations that

may interfere with the
companys ability to
achieve its objectives.

Opportunities

Threats

External factors that the

company may be able to
exploit to its advantage.

Current and emerging

external factors that
may challenge the
companys performance.

Positive

Negative

EXAMPLE

SWOT ANALYSIS FOR COCA-COLA

STRENGTH

WEAKNESSES

The best global brand in the world in terms of

value ($77,839 billion)
Worlds largest market share in beverage
Strong marketing and advertising
Most extensive beverage distribution channel
Customer loyalty
Bargaining power over suppliers
Corporate social responsibility

Significant focus on carbonated drinks

Undiversified product portfolio
High debt level due to acquisitions
Negative publicity
Brand failures or many brands with
insignificant amount of revenues

SWOT for
Coca-Cola
OPPORTUNITIES

THREATS

Bottled water consumption growth

Increasing demand for healthy food and
beverage
Growing beverages consumption in
emerging markets (especially BRIC)
Growth through acquisitions

Changes in consumer preferences

Water scarcity
Strong dollar
Legal requirements to disclose negative
information on product labels
Decreasing gross profit and net profit margins
Competition from PepsiCo
Saturated carbonated drinks market

 Understand your
business better
Address weaknesses
Deter threats
Capitalize on
opportunities
Take advantage of your
strengths
Develop business goals
and strategies for
achieving them.

Limitations

Benefits

BENEFITS AND LIMITATIONS OF

SWOT

Doesn't prioritize issues

Doesn't provide
solutions or offer
alternative decisions
Can generate too many
ideas but not help you
choose which one is best
Can produce a lot of
information, but not all
of it is useful.

INTEGRATED MARKETING
COMMUNICATION (IMC)
Marketing strategy that stresses the importance
of a consistent, seamless, multi-dimensional brand
experience for the consumer.
Branding effort across television, radio, print,
Internet, and in person is presented in a similar
style that reinforces the brands ultimate message

EXAMPLE OF INTEGRATED
MARKETING

IMC AUDIENCE CONTACT TOOLS

IMC

Broadcast Media
(TV/Radio)
Print Media
(Newspapers,
magazine)
Public relations/publicity
Internet
Direct marketing
Sale Promotion
Events and sponsorships
Word-of-Mouth
Point of purchase
displays
Personal selling
Out-of-Home Media

KEY ATTRIBUTES OF IMC

The communication
effort should be
directed at consumers
in order to affect
behavior.

An outside-in approach
should be utilized, that
is, start with the customer
first when developing a
communication strategy.

A well-established
relationship between
the company and the
customer is necessary.

To create a competitive
brand, coordination
between the
communication
disciplines is needed.

To deliver a message
correctly all
communication activities
should be included with
contact points integrated
into the strategy.

ADVANTAGES OF IMC
Aligns short- and long-term marketing in order to avoid conflicts
within an organization;
It is a sound and clear approach;

All target audiences are considered;

Individual and one-to-one communication is encouraged;

Synergy and recall increase;

Results in financial benefits.

RELATIONSHIP MARKETING

Draws attention to the importance of retaining

as well as attracting customers, with emphasis
being placed on the development of long-term
relationships with customers.
Primary goal: to build and maintain a base of
committed customers who are profitable for the
organization.

CHANGE IN FOCUS

DIFFERENCE FROM ORTHODOX

MARKETING

BENEFITS OF RELATIONSHIP
MARKETING
Decrease in Costs

Maximization in revenues

Improvement in Profits and Return on Investments

Acquisition and Retention of Profitable Customers

Reactivation of Dormant Customers

MARKETING
ORIENTATION
(MARKETING PHILOSOPHIES)

DEVELOPMENT OF PHILOSOPHIES

Production
concept

Societalmarketing
concept

Selling
concept

Product
concept

Marketing
concept

PRODUCTION CONCEPT

Consumer will buy a product that is available and highly affordable.

Focus: production and distribution efficiency

Suffer with marketing myopia.

Mistake of paying more attention to the specific products a company
offers than to the benefits and experiences produced by these products.

PRODUCT CONCEPT

Consumers will favor products that offer the most in quality,

performance, and innovative features.
Marketing strategy focuses on making continuous product
improvements.

This also suffers from marketing myopia.

SELLING CONCEPT

Consumers will not buy enough of the firms products unless it

undertakes a large-scale selling and promotion effort.

Typically practiced with unsought goods

Carries high risk.

Focused more on sales transactions rather than building long term
profitable customer relationships.

MARKETING CONCEPT

Achieving organizational goals depends on knowing the needs and wants of target
markets and delivering the desired satisfactions better than competitors do.

Customer focus and value are the paths to sales and profits.

Customer-centered sense and respond philosophy.

Focus: Find the right products for your customers.

DIFFERENCE BETWEEN SALES AND

MARKETING ORIENTATION
Starting
Point
Selling
Concept

Marketing
Concept

Focus

Means

Ends

Factory

Existing
products

Selling and
Promoting

Profits
through
Sales Volume

Markets

Customer
needs

Integrated
marketing

Profits through
customer
satisfaction

SOCIETAL MARKETING CONCEPT

The idea that a companys marketing decisions should consider consumers wants, the
companys requirements, consumers long-run interests, and societys long-run interests.

Focus: Improve the well being of consumers and society as a whole.

Call for sustainable marketing, socially and environmentally marketing.

SOCIETAL MARKETING CONCEPT

(UPS)
Society
(Human Welfare)

Social
Marketing
Concept
Consumer
(Want Satisfaction)

UPS knows that doing whats

right benefits both consumers
and the company. Social
responsibility isnt just good
for the planet, says the
company. Its good for
business.

Company
(Profits)

COST AND BENEFIT FOR ORIENTATION

(EXAMPLE SALES ORIENTATION)

Cost

Benefits

Product cost

Maximum
reachability

High distribution
cost

Aggressive selling

Labor cost

High product and

brand awareness

Promotion cost

High sales volume