Marketing Scope & Nature

Marketing Scope & Nature

DISCLAIMER These notes are for the sole purpose of understanding the concepts of marketing and are to be used for class room purposes only. The logos of certain manufactures used are owned by their respective owners and unauthorized use of them may lead to legal persecution. This presentation also may contain copyrighted material which on no account should be reproduced / reprinted in any form without permission.

marketing ESSENTIALS
Course Goals
Marketing Scope & Nature

Ranjan Paul

Marketing Scope & Nature

ranjanpaul@airtelmail.in Mobile: +91 98919 84804

To outline the marketing function and its role within a corporations business strategies, also hopefully generating a passion for the Marketing discipline and empowering you to evaluate Marketing as a possible career choice To introduce you to marketing strategy and to the elements of marketing analysis: customer analysis, company analysis, and competitor analysis To familiarize you with the elements of the marketing mix (product, pricing, promotion, and distribution strategies) and enhance your problem solving and decision making abilities in these operational areas of marketing tactics

Course Books

Marketing Scope & Nature

Session Questions

Marketing Scope & Nature

Marketing Management A South Asian Perspective by Kotler, Keller, Koshy & Jha Marketing Management Arun Kumar & N. Meenakshi

Other Readings
Business Newspapers & Magazines Research on the Internet

Why is marketing important? What is the scope of marketing? What are some fundamental marketing concepts? How has marketing management changed? What are the tasks necessary for successful marketing management?

Marketing

Marketing Scope & Nature

Good Marketing is No Accident

The roaring success of four-wheeler Tata Ace, in a market earlier dominated by three-wheeler load carriers, was due to a deep understanding of the market needs and customer requirements.

Marketing Scope & Nature

Scope & Nature

What is Marketing?

Marketing Scope & Nature

What is Marketing Management?

Marketing Scope & Nature

Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

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.

Selling is only the tip of the iceberg

Marketing Scope & Nature

What is Marketed?
Goods Services

Marketing Scope & Nature

There will always be a need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed is to make the product or service available. Peter Drucker

Events & Experiences Persons Places & Properties Organizations Information Ideas

Core Marketing Concepts

1. Needs, Wants, and Demands 2. Products and Services 3. Value, Satisfaction and Quality 4. Exchange, Transactions and Relationships 5. Markets

Marketing Scope & Nature

What is a Market?

Marketing Scope & Nature

The set of actual and potential buyers of a product. These people share a need or want that can be satisfied through exchange relationships.

This Is a Need

Marketing Scope & Nature

This Is a Want

Marketing Scope & Nature

Needs - state of felt deprivation including physical, social, and individual needs.

Wants - form that a human need takes, as shaped by culture and individual personality.

This Is Demand

Marketing Scope & Nature

Need / Want Fulfillment

Marketing Scope & Nature

Needs and Wants Fulfilled through a Marketing Offer :

Some combination of products, services, information, or experiences offered to a market to satisfy a need or want.

Wants

Buying Power

Demand

A Simple Marketing System

Marketing Scope & Nature

Key Customer Markets

Consumer Markets Global Markets

Marketing Scope & Nature

Business Markets

Nonprofit/ Government Markets

Value and Satisfaction

Marketing Scope & Nature

Functions of CMOs

Marketing Scope & Nature

If performance is lower than expectations, satisfaction is low.

Strengthening the brands Measuring marketing effectiveness Driving new product development based on customer needs Gathering meaningful customer insights Utilizing new marketing technology

Improving CMO Success

Marketing Scope & Nature

Core Marketing Concepts

Needs, wants, and demands Target markets, positioning, segmentation Offerings and brands

Marketing Scope & Nature

Make the mission and responsibilities clear Fit the role to the marketing culture and structure Ensure the CMO is compatible with the CEO Remember that show people dont succeed Match the personality with the CMO type Make line managers marketing heroes Infiltrate the line organization Require right-brain and left-brain skills

Value and satisfaction Marketing channels Supply chain Competition Marketing environment

Segmentation and Target Marketing

#1
Market Segmentation: Divide the market into segments of customers

Marketing Scope & Nature

Marketing management process

Marketing Scope & Nature

#2

Analysis/Audit - where are we now

Strategies - which way is best? Tactics - how do we get there? (Implementation - Getting there!) Control - Ensuring arrival

Objectives where do we want to be?

Target Marketing: Select the segment to cultivate

The marketplace isnt what it used to be

Information technology Globalization Deregulation Privatization Competition Convergence

Marketing Scope & Nature

New Consumer Capabilities

Marketing Scope & Nature

Consumer resistance Retail transformation

A substantial increase in buying power A greater variety of available goods and services A great amount of information about practically anything Greater ease in interacting and placing and receiving orders An ability to compare notes on products and services An amplified voice to influence public opinion

Company Orientations

Marketing Scope & Nature

Holistic Marketing Dimensions

Marketing Scope & Nature

Production

Product

Selling

Marketing

The Four Ps

Marketing Scope & Nature

Elements of a Modern Marketing System

Marketing Scope & Nature

The Marketing Concept itself has evolved

1) Catering to the customer

Marketing Scope & Nature

Internal Marketing

Marketing Scope & Nature

Internal marketing is the task of hiring, training, and motivating able employees who want to serve customers well.

2) Anticipating the customer

3) Leading the customer

Performance Marketing
Financial Accountability Social Responsibility Marketing

Marketing Scope & Nature

Why is marketing planning necessary?

Marketing Scope & Nature

Social Initiatives Corporate social marketing Cause marketing Cause-related marketing Corporate philanthropy Corporate community involvement Socially responsible business practices

Systematic futuristic thinking by management better co-ordination of a companys efforts development of performance standards for control sharpening of objectives and policies better prepare for sudden developments

Transactions vs. Relationship Orientations

Marketing Scope & Nature

Transaction Modeling for Marketing

Marketing Scope & Nature

Transaction modeling can be used for a large number of marketing applications, from response modeling and acquisition performance modeling, product cross-sell/up-sell, attrition prediction and life-event detection to revenue enhancement and affinity partner selection.

Response modeling

Marketing Scope & Nature

Merchant profiling

Marketing Scope & Nature

Transaction data can be used to predict which cardholders will respond to marketing campaigns. Both general responder and specific campaign models can be built. From the data such things as cardholder gender, age, petownership, hobbies, travel habits, family size and composition, price sensitivity, quality sensitivity and loyalty can be derived. This is very valuable in terms of executing highly targeted and high-margin marketing campaigns.

A great deal can be understood about a merchant by analyzing who buys its products, where they buy them, how much they spend and how often merchandise is purchased. This data is obviously very valuable both to financial institutions and to merchants themselves, and provides all kinds of marketing opportunities. It is also possible to compare merchants to their competitors to evaluate possible cross-marketing campaign opportunities.

Attrition prediction

Marketing Scope & Nature

Marketing Management Tasks

Develop market strategies and plans Capture marketing insights Connect with customers Build strong brands Shape market offerings Deliver value Communicate value Create long-term growth

Marketing Scope & Nature

Transaction data tracks customers behavior and can therefore be a very powerful tool to create models to predict attrition, just as it can be used to predict bankruptcy and fraud.

The Next Wave

Marketing Scope & Nature

Marketing Scope & Nature

New Paradigms in Marketing

Marketing Scope & Nature

Social Media

Marketing Scope & Nature

Social media describes the online technologies and practices that people use to share opinions, insights, experiences, perspectives and media itself. Social media can take many different forms, including text, images, audio, and video. These sites typically use technologies such as blogs, message boards, podcasts, wikis, and vlogs to allow users to interact. Source: Wikipedia

Word of Mouth Marketing

WOMM: Umbrella term
Buzz marketing
Special hook, event, promotion. Aqua Teen Hunger Force Boston Bomb Scare

Marketing Scope & Nature

Aqua Teen

Widget Marketing

Marketing Scope & Nature

Viral marketing
Branded material, websites, widgets, bligets, videos, utilities, collaboration tools etc. that sneezers spread. ParkRidge47, Vote Different Identifying and finding the influencers Turning most loyal customers into citizen marketers Interacting at popular offline places like Buzz Oven Bree, lonelyGirl15
Bree

Influencer marketing

Evangelist marketing Street marketing Stealth / Undercover marketing

Source: Justin Kirby, & Paul Marsden (2006). Connected marketing. Oxford, UK: Butterworth-Heinemann. 198 YouTube
Buzz Oven

Cool plug-n-play things for your sidebar

Marketing Scope & Nature

Definition Marketing centered around obtaining customer consent to receive information from a company. Information Coined and popularized by Seth Godin, permission marketing is the opposite of traditional interruption marketing. Permission marketing is about building an ongoing relationship of increasing depth with customers. In the words of Seth Godin, "turning strangers into friends, and friends into customers." Permission marketing has been hailed as a way for marketers to succeed in a world increasingly cluttered with marketing messages.

Marketing Scope & Nature

Definition Unconventional marketing intended to get maximum results from minimal resources. Information Coined by Jay Conrad Levinson, guerilla marketing is more about matching wits than matching budgets. Guerilla marketing can be as different from traditional marketing as guerilla warfare is from traditional warfare. Rather than marching their marketing dollars forth like infantry divisions, guerilla marketers snipe away with their marketing resources for maximum impact.

Source: http://www.sethgodin.com/permission/

New Paradigm
Democratization of 4Ps paradigm Citizen branding Collective collaboration Collective risk sharing Collective product innovation Collective IP ownership Citizen marketers will sell remarkable ideas Innovators should adopt the 1% rule

Marketing Scope & Nature

Its About Social Behavior

Marketing Scope & Nature

If you dont find the sneezers or connectors, the 80/20% rule wont matter

Work backwards
Build your brand around your idea first. If the community you are targeting does not coalesce and rally around the idea, continuing to build the product is irrelevant

Create your own blue ocean

If you play it safe and go by the rules of your industry, value chain, and business model youre dead! Most industries and markets are saturated and highly concentrated.

Its not about a cheaper product or your idea. Try to change customer behavior. Its not about better coffee its about the place I am not looking for a drill bit I need to make a hole Its not about the hog, its about a lifestyle Its not about the sound its about how it makes me feel Its not about the sound its about being hip Its about my space Its about my video Its about my opinion Its about the experience Its about your choices, places, and time Examples Apple, Starbucks, JetBlue, MySpace, Harley-Davidson, Tivo, Stew Leonards, Threadless

Implications

Marketing Scope & Nature

TRENDS

Marketing Scope & Nature

Reached the tipping point The static web maturing Monologue marketing out Live Web (a/k/a Blogosphere) is making information transparent Word travels fast People are more likely to act on a peers recommendation by factor X Marketing is a reflection of social paradigms The new social media and networks changing customer expectation and behavior

Changes in Consumer
Demographics
Maturity Polarization: some a lot and others little Value orientation Skepticism Disloyalty

Marketing Scope & Nature

Changes in Consumer

Marketing Scope & Nature

Technology: Products and services will have much more technology and will be commercialized in more technological way
Product and brand (Product loses out to technological factor) Publicity: (From TV to Internet) Prices: Mixture of strategies

Changes in Consumer
Competition

Marketing Scope & Nature

Emerging Consumer Markets in the 21st Century

Marketing Scope & Nature

Companies have to understand themselves: Look for loyalty Sales force in reconstruction: specialized and with more technology Channels of distribution: vertical integration and new roles Prices: when the competition is concentrated, the consumer pays Products and brands: companies tend to innovate less when they are alone, but they have learned that the best way to stay alone is to innovate

Electronic Articles (HDTV, WebTV, digital photography) In their free time, consumers will look for intense experiences that relieve stress (rafting, rappel)
Allan J. Magrath

Emerging Consumer Markets in the 21st Century

Marketing Scope & Nature

Emerging Consumer Markets in the 21st Century

Marketing Scope & Nature

Health as a National Pastime (nutrition, diets, personal care) Products and Services anti-ageing (Creams, treatments) Sport Equipment and Articles (Golf, Mountain Climbing, Tennis)

Caring for the environment (recyclable packages) Outdoor articles ( garden, patio, swimming pool)
Allan J. Magrath

Allan J. Magrath

10

Marketing In The Indian Context

Marketing Scope & Nature

Marketing Scope & Nature

Circa: 2011

Marketing Scope & Nature

Internet Usage and Population Statistics

YEAR 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2009 2010 Users 1,400,000 2,800,000 5,500,000 7,000,000 16,500,000 22,500,000 39,200,000 50,600,000 40,000,000 42,000,000 81,000,000 81,000,000 Population % Pen. 1,094,870,677 0.1 % 1,094,870,677 0.3 % 1,094,870,677 0.5 % 1,094,870,677 0.7 % 1,094,870,677 1.6 % 1,094,870,677 2.1 % 1,094,870,677 3.6 % 1,112,225,812 4.5 % 1,112,225,812 3.6 % 1,129,667,528 3.7 % 1,156,897,766 7.0 % 1,173,108,018 6.9 %

Marketing Scope & Nature

Usage Source ITU ITU ITU ITU ITU ITU C.I. Almanac C.I. Almanac IAMAI IWS ITU

ET~Jun 14, 2001

http://www.internetworldstats.com/asia/in.htm

Cellular Phone Story

City/Circle All Metros
A' Circle B' Circle C' Circle All India

Marketing Scope & Nature

Automobile Domestic Sales Trends
Category Passenger Vehicles 2003-04 902,096 2004-05 1,061,572 2005-06 1,143,076 2006-07 1,379,979 2007-08 1,549,882

Marketing Scope & Nature

(Number of Vehicles) 2009-10 1,949,776

May'2010

Jun'2010

% Growth over previous month

55,827,786 57,535,005
148,719,464 152,757,251 171,258,663 175,786,096 68,489,798 70,507,810

3.06%
2.72% 2.64% 2.95% 2.77%

2008-09 1,552,703

Commercial 260,114 Vehicles Three Wheelers Two Wheelers 284,078 5,364,249

318,430 307,862 6,209,765 7,897,629

351,041 359,920 7,052,391 8,906,428

467,765 403,910 7,872,334

490,494 364,781 7,249,278

384,194 349,727 7,437,619 9,724,243

531,395 440,368 9,371,231 12,292,770

444,295,711 456,586,162

Grand Total 6,810,537

10,123,988 9,654,435

http://www.coai.com/statistics.php

Source: SIAM

11

References:

Marketing Scope & Nature

Marketing Management A South Asian Perspective 13the By Kotler, Keller, Koshy, Jha Principles of Marketing 11the Kotler & Armstrong Mckinsey Global Institute SIAM Marketing Whitebook 2006, Business World Economic Times Mint Times of India Multiple Resources on Internet

12