MARKETING MANAGEMENT

INTRODUCTION
What is marketing?

All the acts of firms/managers to

identify and translate customer
needs into utility to earn profits
through their satisfaction.
• The main thrust is CUSTOMER
SATISFACTION
But why customers are so important for
every firm?
 Tough competition
 Customers are aware of quality, variety, price
and other products in the market
 They are the main source of demand and
henceforth the revenue and profits.
DEMAND SELL REVENUE PROFITS
 Modern-day firms are turning to be more
and more customer- oriented and
customer- centric
 Therefore customer is the king.

FIRM 1 FIRM 2

CUSTOMER

FIRM 3
FIRM 4
• To win this battle , firms resort to an
INNOVATIVE, CREATIVE and
COMMUNICATIVE process of
MARKETING
 MARKETING DEFINED
• "The management process which
identifies, anticipates and supplies
customer requirements efficiently
and profitably"
- Chartered Institute of Marketing

(Focus is on customers. Profits result

from meeting customers’ needs
effectively and efficiently)
 MARKETING DEFINED contd.
• “A social and managerial process by which individuals and
groups obtain what they need and want through creating and
exchanging products and value with others.”
- Philip Kotler and Gary Armstrong

• “Marketing is the business process by which products are

matched with markets and through which transfers of
ownership are affected.”
-Cundiff and Still

• “Marketing is the total system of business activities designed

to plan, promote and distribute want satisfying products and
services to present and potential customers.”
-Stanton
 Mktg Diagrammatically
substantiated
Origin Means End
Customers’
Needs, desires
Firm’s task to Earning
demands
Identify these Profits
Needs & Through
Translate them Customers’
Into utility satisfaction

Products &
services
 Nature/characteristics of marketing
• Customer-oriented
• Must Deliver Value
• Surrounded by customer needs
• Part of total environment
• Affect company strategy
• Partially a science and an art
• Information/communication function
• Exchange function
• Works as a system
• Goal-oriented
• A process-dynamic, social and managerial
• Creation of utilities- place, time, possession
• Manager’s intellectual and creative process
• Guiding element of modern firms
• Inevitable and continuous task
 Scope of marketing
• It is an umbrella term that spreads itself to cover
a whole set of numerous functions/ activities-all
aiming at _______________.

ACTIVITIES/FUNCTIONS

Physical supply Facilitating

Research Exchange
1. Financing
1. Marketing 1. Buying & 1. Transportation, 2. Risk Taking
Research Assembling 3. Standardization,
2. Storage or
2. Selling & Grading or Branding
Warehousing
2. Product Dividing 4. Market Information
Planning & 3. Packaging 5. Salesmanship
Development 6. Advertising
7. Pricing
 Importance of marketing
• Mktg brings new varieties of goods & services-
aims at creation and delivery of standard of
living
• Provides wide employment opportunities
• It has converted yesterday’s luxuries into today’s
necessities
• Acts as important multiplier and effective engine
of development
• Creation of utilities- place, time, possession
Importance of marketing (contd…)
• Satisfies individuals’ and society’s needs at the
place and price they desire by:
producing goods
supplying services
fostering innovations

• To realize profit, a sale has to be made. To

make the sale, a customer has to be created. To
create customer, his needs have to be satisfied.
To meet customer needs, marketing is essential.

• Mktg is like eyes and ears of business-it keeps

the business in CLOSE CONTACT with its
environment and informs of events that can
influence its operations.
 THUS,
Marketing – Managing Profitable Customer Relationship.

Two Goals – Attract New Customers by promising superior value

Keep and Grow Current Customers by delivering

satisfaction

Broadly, Marketing is a social and managerial process by which

individuals and organizations obtain what they need and want.

Marketing involves building profitable, value-laden exchange

relationships with customers.
Marketing is a process by which companies create values for
customers and build strong customer relationships in order to
capture value from customers in return.
 MARKETING PROCESS

Understand Design a Construct an Build Capture

the customer- integrated profitable value from
marketplace driven marketing relationships customers
and marketing program that and create to create
customer strategy delivers customer profits and
needs and superior delight customer
wants value equity
1. Understand the marketplace and customer needs and wants

•Needs, Wants and Demands

•Market Offerings

•Value and Satisfaction

•Exchanges and relationships

•Markets
 Elements of a Modern Marketing System

Company
(marketer)
Suppliers Marketing
Final User
Intermediaries

Competitors

Major Environmental Forces

 2. Design a Customer-Driven Marketing Strategy

Marketing Management – art & science of choosing target markets

and building profitable relationships with them.

To design a winning marketing strategy, marketing manager must address

two
questions:

•What customers to serve (market segmentation and target market)

•How to serve these customers best (What is our Value Proposition)

Value Proposition- The set of benefits or values it promises to deliver to

consumers to satisfy their needs.
 Marketing Management Orientations /
Corporate orientation towards Marketing

Introduction
• Firms vary in their perceptions about
business, and have different orientations
about marketplace.
• This has led to emergence of different
concepts of marketing. Some of the
noteworthy ones are:
 Marketing Management Orientations /
Corporate orientation towards Marketing (Contd..)

• The exchange concept

• The production concept TRADITIONAL
• The product concept
• The selling concept

• The marketing concept

• The societal marketing concept MODERN
 Marketing Management Orientations (Contd…)

EXCHANGE CONCEPT

• The central idea of marketing according to this concept

is mere exchange of products between seller and the
buyer

• The main aim is TRANSFER OF OWNERSHIP against

some monetary value called PRICE

• Outdated and narrow view

 Marketing Management Orientations (Contd…)
PRODUCTION CONCEPT

• According to this concept, marketing is a mere addition to

production.

• In firms where this ideology is followed, PRODUCTION

DOMINATES THE THINKING PROCESS. They believe that
marketing can be managed by managing production

• The concept holds that consumers, as a rule, support those

products that are produced in great volume at a low unit cost.

• All effort is focused on production with an aim to achieve lowest

production cost & maximum output

• Lower cost will automatically bring all customers to their doors.

 Marketing Management Orientations (Contd…)

PRODUCT CONCEPT

• According to this concept, marketing aims at PRODUCT

EXCELLENCE, IMPROVED PRODUCTS, IDEALLY
DESIGNED PRODUCTS.

• It also incorporates the objective of WINNING

MARKETS AND EARNING PROFITS THROUGH
PRODUCT QUALITY ASSURANCE

• Fails to focus on actual needs of customers despite of

emphasizing on product attributes.
 Marketing Management Orientations (Contd…)

SELLING CONCEPT
• The central idea of marketing according to this concept is
SELLING WHAT IS PRODUCED.
• The focus of effort is on AGGRESSIVE PROMOTION AND
PUSHING OF GOODS IN MARKET.
• The tools used are –
Heavy advertising
High –power personal selling,
large scale sales promotion,
Heavy price discounts and
Strong publicity
Companies following selling concept assumes that selling is
synonymous to marketing. They aim to sell what they make
rather than making what the market wants.
 Marketing Management Orientations (Contd…)

MARKETING CONCEPT

• According to this concept, business is basically a ‘need-

satisfying process’

• Businesses should be managed keeping in mind

CONSUMER and HIS NEEDS as the FOCUS.

• It prescribes that all the goals of business, including

profit, must be realized through consumer satisfaction

• It is customer centered and not product centered

• It is to find the right products for the customer and not

right customers for your product.
 SELLING vs MKTG
• START FOCUS MEANS ENDS

PRODUCTS PROFITS THROUGH

FACTORY SELLING SALES

CUSTOMER COORDINAT- PROFITS THROUGH

MARKET NEEDS ED MKTG CUSTOMER SATIS_
FACTION
 Marketing Management Orientations (Contd…)
SOCIETAL MARKETING CONCEPT

• Focus is on BENEFIT of the SOCIETY AT LARGE

• Aim is to enhance the standard of living in the society and stress is

on long run societal welfare.

• Keeping a check on :
Environmental degradation
Preserving resources and environmental quality
Pollution,etc.

Society (Human Welfare)

Societal
Marketing
Consumers (Want Satisfaction) Concept
Company (Profits)
3. Preparing an Integrated Marketing Plan and Program

This program is developed to actually deliver the intended value to target

market.

This program builds customer relationship by transforming the marketing

strategy into action.

It consists of firm’s marketing mix to implement the strategy.

Marketing Mix tools are classified as broad groups called 4Ps of Marketing

Product
Price
Place
Promotion
 4. Building and Delivering Customer Value/ Relationships
Marketing has the main objective of ‘managing profitable customer
relationships’ which can be done by two of its primary tasks:

>Attracting new customers by promising superior customer

value

>Keeping (retaining) and growing current customers by

delivering satisfaction through continuous value delivery.

The common element in both of these is VALUE DELIVERY to earn

customer satisfaction.
Attracting
Create satisfaction
Firm produces New
&
utility as per customers PROFITS
Ensure expected
Customers’ &
Value delivery
requirements Long-term
Retain
survival
Current
customers
 4. Building and Delivering Customer Value/ Relationships (Contd..)

CONCEPT OF VALUE FOR CUSTOMERS

• Customers’ purchase decisions are guided by the idea of UTILITY
i.e., satisfaction derived.

• ‘Value’ represents TOTAL UTILITY plus other benefit- oriented

elements (the customer seeks to get in exchange of his money)
resulting in a “PACKAGE OF BENEFITS”.

• This total package/ bundle of benefits exchanged against some

monetary amt. for satisfaction is understood as VALUE .
Standard Godrej has created an Mc Donalds offers a
Chartered’s global inbuilt curd maker in its bunch of benefits
credit card which can 400-lts refrigerators- clearly represented in
be used across the the customer is getting its basic ideology-
globe vis-a- vis other value addition at no food, family, fun
banks’ country substantial extra cost.
specific cards.
4. Building and Delivering Customer Value/ Relationships (Contd..)
Marketing defined in context of VALUE

It is the process by which companies CREATE VALUE for

customers & BUILD STRONG RELATIONSHIPS in order to
CAPTURE VALUE from customers in return.

The essence is : building value- laden, profitable

exchange relationships with customers.

In a nutshell, “if companies take care of the customers by

satisfying them and delivering value to them, market share &
profits will automatically follow.’’

Why is delivery of customer value imp.?

Customer value is directly related to customer satisfaction
Helps developing & managing sustained customer relationships
This will subsequently lead to long term profitability.
4. Building and Delivering Customer Value/ Relationships (Contd..)
Customer Relationship Management – The overall process of building and
maintaining profitable customer relationship by delivering superior customer
value and satisfaction.

Customer Perceived Value: The customer’s evaluation of the difference

between all the benefits and all the costs of a market offering relative to those of
competing offers.

The value can be enhanced by adjusting any element of marketing mix.

Larger the value-cost gap, the ___________ is his satisfaction.

Customer Satisfaction: The extent to which a product’s perceived performance

matches a buyer’s expectations.

If product’s performance < Expectations Dissatisfied Customer

If product’s performance = Expectations Satisfied Customer
If product’s performance > Expectations Delighted Customer

Customer Delight: promising only what they can deliver, and then delivering
more than they promise.
 4. Building Customer Relationships (Contd…)
Customer Relationship Levels and Tools

• Basic relationship with low-margin customers, generally low value routine

purchases

• Full partnership with key customers, generates long-term and huge profits, huge
value purchases

Most companies are developing customer loyalty and retention programs

Changing Nature of Customer Relationships

• Relating with more carefully selected customers

Selective Relationship Management

• Relating for the long term

• Relating Directly
 4. Building Customer Relationships (Contd…)
Partner Relationship Management

Working closely with partners in other company departments and outside the
company to jointly bring greater value to customers.

Every functional area inside the company is now interacting with the customers.

Companies are going for supply chain management, strategic alliance to

strengthen their relationships with partners.

Marketing is a value creating and value delivering process

It involves four steps in the value providing process –

12.Value selection
13.Value creation/value delivery
14. Value communication
15.Value Enhancement
 Mktg as a value creating & value
delivery process
VALUE VALUE VALUE VALUE
COMMUNI- VALUE ENHANCE-
SELECTION CREATION
-CATION DELIVERY -MENT

Firm decides It produces/ communicates actually delive-

collect feed-
“What” it needs creates value by value proposition -ring what it
-back from
To deliver to way of desired thru creative promised
customers to
Customers? Goods & services mktg communica-
enhance,
tion improve its
existing
offerings
5. Capturing Value from Customers

The outcomes of creating customer value

• Customer Loyalty and retention

Customer Lifetime Value – The value of the entire stream of purchases that a
customer would make over a lifetime of patronage.

Good CRM Customer Delight Loyalty

• Growing share of customer

Share of Customer – The portion of the customer’s purchasing that a

company gets in its product categories.

• Building Customer Equity

Customer Equity – Total combined customer lifetime values of all of the

company’s customer.
 Building the right relationship with the right customer

Butterflies True Friends

Good fit between Good fit between
company’s offerings and company’s offerings and
High customer’s needs; high customer’s needs;
profit potential highest profit potential

POTENTIAL
PROFITABILITY
Strangers Barnacles
Little fit between Limited fit between
company’s offerings and company’s offerings and
Low customer’s needs; customer’s needs; low
lowest profit potential profit potential

Short-term Customers Long-term Customers

PROJECTED LOYALTY