Principles of

Marketing

Why it is supremely important to

have satisfied customers?
1. Buys more & stays loyal
2. Buys additional products as the company introduces

3. Talks favorably about the company

4. Pays less attention to competing

5. Costs less to serve then new consumer

What is Marketing???
Marketing is a social and managerial process by which
individuals and groups obtain what they need and want
through creating, offering, and exchanging products of
value with others

Marketing is simply creating demand for

you product

Importance of Marketing
Marketing influences many aspects of peoples
daily lives
All goods and services they buy
Stores in which they purchase
Radio and TV programs they consume are paid for
by advertising
CV they produce to impress potential employers

Marketing offers exciting career paths

Marketing is important to every organisation

Importance of Marketing
Marketing concepts and techniques are also
relevant for non-profit companies
Marketing plays a major role in economic
growth and development by
Stimulating research and new ideas, resulting in
new goods and services
Providing choice among products which may
satisfy customers, resulting in fuller employment,
higher incomes and higher standards of living

Scope of Marketing

Goods

Scope of Marketing

Experiences

Scope of Marketing

Events

Scope of Marketing

Persons

Scope of Marketing

Services

Scope of Marketing

Places

Scope of Marketing

Ideas

Scope of Marketing
Information

Scope of Marketing

Organizations

Modern Marketing System

Suppliers

Company
(Marketer)

Marketing
Intermediaries

Environment

Environment

Competitors

End User
Market
15

Some Basic Concepts

Need

A state of felt deprivation of some basic satisfaction

Wants

Are desire for specific satisfiers to fulfill the needs

Demand

Are wants for specific products that are backed by an

ability and willingness to buy them

Some Basic Concepts

Market Offering

Some combination of products, services,

information or experiences offered to a market to
satisfy a need or want
Customer Value
A customers estimate of a products over all

ability to satisfy his or her needs

Some Basic Concepts

Customer Satisfaction

The extent to which a products perceived

performance matches a buyers expectations

Some Basic Concepts

Value

The difference between the benefits a customer

derives from an offering and the cost of those
benefits

A good or service that does not meet a

consumers needs results in low customer
value, even if the price is very low

A higher price may be acceptable if the

desired benefits are obtained

Some Basic Concepts

Very Important to remember

Customer are and will always be value

maximizers

An organisation that offers superior customer

value is likely to win and keep customers

In how many ways People can

get what they want?
Four ways people can obtain what they want
1. Self-production
2. Coercion
3. Begging
4. Exchange

Marketing emerges when people

decide to satisfy their needs &
wants through exchange

For Exchange To Take Place

5 conditions must exist

2 parties

Something of value for other

Capable of communication

Free to accept or reject the offer

It is appropriate or desirable to deal with

the other party

Market

Market
A set of All actual and potential buyers of a product
People Who
Exhibit Need

Resources to
Exchange

Willingness to
Exchange

Market
Buyers who
share a
particular need
or want that can
be satisfied
through
exchange or
relationships.

Actual
Buyers

Potential
Buyers

Market
Market Place
Physical market as like shopping centre
Market Space
Digital market as on the web

What is Marketing???
Marketing is a social and managerial process by which
individuals and groups obtain what they need and want
through creating, offering, and exchanging products of
value with others

Marketing is simply creating demand for

you product

4 Types of business
orientations

Production Concept
Consumer will favor those product that are widely
available and low in cost
Managers of production oriented organizations
concentrate on achieving high production efficiency
and wide spread distribution

Product Concept
Consumer will favor those product that offer the
most quality, performance, or innovative features

Managers of these organizations focus their energy

on making superior products and services and
improving them overt time

Selling Concept
Consumer if left alone ordinarily will not buy enough
of the organizations products
The organization must undertake an aggressive selling
and promotion effort

Many organization practice selling concept when they

have over capacity
Their aim is to sell whet they make rather then what
the market buys

Marketing Concept
Key in achieving organizational goals consist in
determining the needs and wants of target markets
and delivering the desired satisfaction more
effectively and efficiently than competitors

Marketing and Sales

Concepts Contrasted
Starting
Point

Focus

Factory

Existing
Products

Means

Ends

Selling
and
Promoting

Profits
through
Volume

The Selling Concept

Market

Customer
Needs

Integrated
Marketing

Profits
through
Satisfaction

The Marketing Concept

32

Regardless of its orientation, marketing

managements crucial task is to create profitable
relationships with customers

Customer Relationship
Management
The overall process of building and maintaining
profitable customer relationships by delivering
superior customer value and Satisfaction

Relationship
Building Blocks

Customer Perceived
value

Customer
Satisfaction

Difference
between Total
Customer Value
and Total
Customer Cost

The extent to
which a products
perceived
performance
matches a buyer's
expectations

Customer
Delivered Value

Total Customer Value

Total Customer Cost

Product
Value

Monetary
Cost

Service
Value

Time Cost

Personnel
value

Energy
Cost

Image
value

Psychic
Cost

Strategic Planning
The process of developing and maintaining a strategic
fit between the organizations goals and capabilities
and its changing marketing opportunities
Business Unit,
Product, and
marketing level

Corporate Level

Defining the
Company
Mission

Setting
Company
Objectives
and Goals

Designing
the
business
Portfolio

Planning
marketing and
other functional
strategies

Mission Statement
A statement of the organizations purpose what it
wants to accomplish in the larger environment

SWOT Analysis / TOWS Matrix

Strength
Internal Environment
Weaknesses
Opportunities
External Environment
Threats

Company Objectives/GOALS

SMART
Specific
Measurable
Achievable
Realistic
Time Bound

Designing Business Portfolio

The collection of Businesses and Products that make
up the company

Analyze the current businesses

-Establish SBUs
-Assign resources to SBUs

Planning new business, downsizing or

terminating older business

Growth / downsizing
Product/market expansion Grid
Existing Products

New Products

Current
Market

Market
Penetration
Strategy

Product
Development
Strategy

New
Market

Market
Development
Strategy

Diversification
Strategy

Planning Marketing
Partner Relationship Management
Working closely with partners in other company
departments and outside the company to jointly bring
greater value to customer
Partnering with others in the company
Partnering with others in marketing System

Value Chain
The series of departments that carry out value-creating
activities to design, produce, market, deliver and support
a firms products

Value Delivery Network

The network made up of the company, suppliers,
distributors, and ultimately customers who partner with
each other to improve the performance of the entire
system

The Marketing Process

1. Analyzing Marketing
Opportunities

4. Managing the Marketing

Effort

2. Selecting Target
Markets

3. Designing
Marketing Mix

The Marketing Process

Market Segmentation
Dividing the total market into distinct groups of Buyers
who have distinct need, characteristics, or behavior and
who might require a separate product
Target Marketing

The process of evaluating each market segments

attractiveness and selecting one or more segments to
enter

The Marketing Process

Market positioning
Arranging for a product to occupy a clear, distinctive,
and desirable place relative to competing products in
the minds of target customers

Marketing Strategy for CA

The marketing Logic by which the business hopes to
achieve its marketing objectives

Market Leader Strategies

Market Challenger Strategies

Market Follower Strategies

Market Nicher Strategy

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
Price
Place
Promotion

4 Ps of Marketing

Managing The marketing Effort

Marketing Control
The process of measuring and evaluating the results of
marketing strategies and plans and taking corrective
action to ensure that objectives are achieved
Marketing Audit
A comprehensive, systematic, independent, and periodic
examination of a companys environment, objectives,
strategies, and activities to determine problem areas and
opportunities to recommend a plan of action to improve
the companys marketing performance

Contents of a Marketing Plan

Executive Summary
Current Marketing Situation
Threats and Opportunity Analysis
Objectives and Issues
Marketing Strategy
Action Programs
Budgets
Controls

Forces Shaping the Digital Age

Digitalization &
Connectivity

Customization &
Customerization

Digital Age

New Intermediaries

The Internet
Exploion

Forces Shaping the Digital Age

Intranet
the network that connect people in the company to each
other and to the company network
Extranet

A network that connects a company with its suppliers

and distributors
Internet

computer network that allows users all over globe to

connect with each other

Forces Shaping the Digital Age

Customization
taking the initiative to individualize the marketing
offering
Customerization

Leaving it to individual customers to design the

marketing offering

E-Business
The use of electronic platforms intranets, extranets &
internet to conduct a companys business
E-Commerce
Buying and selling processes supported by electronic
means, primarily the internet
E-Marketing
Companys effort to communicate about, promote and
sell products and services over the internet

E-Commerce
Benefits to Buyers

Convenient

Easy & Private

Greater product Access & Selection

Comparative information

Interactive and immediate

Benefits to Sellers

Customer relationship building

Reduced Cost

Incensing speed and efficiency

Flexibility

Global reach

E-Commerce Domains
Targeted to
Consumers

Targeted To Business

Initiated By
business

B2C
Business to
Consumer

B2B
Business to
Business

Initiated By
Consumers

C2C
Consumer to
Consumer

C2B
Consumer to
Business

Managing Marketing
Information

Marketing Information Systems

Marketing Information Systems, consist of people,
equipment & procedures to gather, sort,
analyze, evaluate and distribute needed, timely,
and accurate information to the marketing
decision makers

Elements of MIS
1.Internal Records
2.Marketing Intelligence
3.Marketing Research

Marketing Intelligence
The systematic collection and analysis of publicly
available information about competitors and day
to day developments in the market

Sources of MIS
1.Sales Force
2.distributors, retailers & other intermediaries
3.Competitors products/open house
seminars/employees

4.customer advisory cell

5.Purchase information from outside source

Marketing Research
Marketing Research is a systematic design,
collection, analysis, and reporting of data and
findings relevant to a particular or specific
marketing situation facing the company
MR Firms fall into 3 categories
1.Syndicated service research firms
2.Custom marketing research firms

3.Specialty-line marketing research firms

Define the problem & research objectives

Developing Research Plan for collecting

Information

Implementing the research plan

collecting and analyzing information

Interpreting and reporting the findings

Research Objectives
Exploratory
Research

Descriptive
Research

Causal
Research

Gathers preliminary information

that will help define the problem
and suggest hypotheses

Describes things as market

potential for a product or the
demographics and consumers
attitudes
Test hypotheses about causeand-effect relationships

Step 2 Research Plan

Research plan development follows these
steps:
Determining Specific Information Needs

Gathering Secondary information

Planning Primary Data Collection

Information Sources
Secondary
Information that
already exist
somewhere,
having been
collected earlier
or for other
purposes

Primary

Data

Both Must Be:

Relevant
Accurate
Current
Impartial

In formation
collected for the
specific purpose
at hand

Research Approach
Observational
Research
Gathering data
by observing
people,
actions and
situations
(Exploratory)

Survey
Research
Asking
individuals
about attitudes,
preferences or
buying
behaviors
(Descriptive)

Experimental
Research
Using groups of
people to
determine
cause-and-effect
relationships
(Causal)

Contact Method
Contact Method
Mail Questionnaire
Online
Telephone Interviewing

Personal interviewing
Group Interviewing

Mail

Telephone

Personal

Online

Flexibility

Poor

Good

Excellent

Good

Quantity of
Data Collected
Control of
Interviewer
Control of
Sample
Speed of Data
Collection
Response Rate

Good

Fair

Excellent

Good

Excellent Fair

Poor

Fair

Fair

Excellent

Fair

Poor

Poor

Excellent

Good

Excellent

Fair

Good

Good

Good

Cost

Good

Fair

Poor

Excellent

Sampling Plan
Sample

A segment of population selected for marketing research

to represent the total population
Who???
How Many???
How???
Probability sampling
Non probability sampling

Research Instruments
Research Instruments

Questionnaire
What questions to ask?
Form of each question?
Closed-end
Open-end
Wording?
Ordering?

Mechanical Devices
People Meters
Supermarket Scanners

Marketing Research Process

Step 3. Implementing the Research

Plan
Collecting the
Data

Processing the
Data

Research Plan

Analyzing the
Data
73

Marketing Research Process

Step 4. Interpreting and Reporting
Findings

Researcher Should Present Important Findings

that are Useful in the Major Decisions Faced by
Management.
Step 1. Interpret the Findings

Step 2. Draw Conclusions

Step 3. Report to Management

Consumer Markets and

Consumer Buying Behavior

How do consumer characteristics influence

buying behavior?
What major psychological processes
influence consumer responses to the
marketing program?
How do consumers make purchasing
decisions?

In what ways do consumers stray from a

deliberative, rational decision process?

Consumer Market
All individuals and households who buy or acquire goods
and services for personal consumption
Consumer Buyer Behavior

Buying behavior of final consumers

The central question for marketers is:
How do consumers respond to
various marketing efforts the company
might use?

Model of Buyer Behavior

Marketing and
Other Stimuli

Buyers Black Box

Buyer Responses

Marketing

Buyer Characteristics
Buyer Decision Process

Product Choice
Brand Choice
Dealer Choice

Product
Price
Place
Promotion

Other

Economic
Technological
Political
Cultural

Purchase Timing
Purchase Amount

78

Factors Influencing Buying

Behavior
Four types of factors shape and influence a
consumers buying behavior

Cultural
Social
Personal
Psychological

Factors Influencing Buying

Behavior
Cultural factors
Culture

Sub Culture

Basic values, perceptions, wants

and behaviors learned from
family and other institutions

people with shared values

system based on common life
experiences and situations

Social Class
Relatively permanent and ordered
divisions in a society whose members
share similar values, interest and
behaviors

Factors Influencing Buying

Behavior
Social Factors
Family

Groups

Roles & Statuses

Opinion Leaders:- Person within a reference group who, because

of special skills, knowledge, personality, or other characteristics, exerts
influence on others

Factors Affecting Consumer Behavior: Personal

Personal
Personal Influences
Influences
Age
Age and
and Life
Life
Cycle
Cycle Stage
Stage

Occupation
Occupation

Economic
Economic
Situation
Situation

Personality
Personality &&
Self-Concept
Self-Concept

Lifestyle
Lifestyle Identification
Identification
Activities
Activities

Interests
Interests

Opinions
Opinions
82

Factors Influencing Buying

Behavior
Psychological Factors
Motivation
Perception
Learning
Beliefs & Attitude

Assignment

Types Of Buying Decision

Behavior
Brand differences

High

Significant
Few

Low

Complex
Buying
Behavior

Variety-seeking
buying Behavior

Dissonance
reducing Buying
behavior

Habitual Buying
Behavior

Involvement

Buying Decision Process

Purchase
Decision
Evaluation
of Alternatives
Information
Search
Need
Recognition

Post purchase
Behavior

Need Recognition
State Where the
Buyers Needs
are Fulfilled and
the Buyer is
Satisfied.

Buyer
Recognizes a
Problem or a
Need

Needs Arising
From:
Internal Stimuli

Hunger
External Stimuli-

Friends

Marketing communications often

stimulate need recognition.

Information Search
Personal Sources

Commercial Sources
Public Sources
Experiential Sources

Family, friends, neighbors

Most effective source of
information

Advertising, salespeople
Receives most information from
these sources
Mass Media
Consumer-rating groups
Handling the product
Examining the product
Using the product

Evaluation of Alternatives
Consumer May Use Careful
Calculations & Logical Thinking
Consumers May Buy on Impulse and
Rely on Intuition
Consumers May Make Buying Decisions
on Their Own.
Consumers May Make Buying Decisions
Only After Consulting Others.

Marketers Must Study Buyers to Find Out

How They Evaluate Brand Alternatives

Purchase Decision
Purchase Intention

Desire to buy the most preferred brand

Attitudes
of Others

Unexpected
Situational
Factors

Purchase Decision

Post Purchase Behavior

Satisfied Customer!

Consumers
Expectations of Products Performance.
Products Perceived
Performance.

Dissatisfied Customer

Adoption Process
Awareness: Consumer is aware of
product, but lacks information.
Interest: Consumer seeks
Information about new product.
Evaluation: Consumer considers
trying new product.
Trial: Consumer tries new
product on a small scale.
Adoption: Consumer decides
to make regular use of product.

Early Majority

Innovators

Percentage of Adopters

Adoptors Categories

Early
Adopters

34%

Late Majority

16%

13.5%
2.5%

Early

Laggards

34%

Time of Adoption

Late

Infl. of Product Char. On ROA

Communicability

Relative Advantage

Can results be easily

observed or described
to others?

Is the innovation
superior to existing
products?

Compatibility

Divisibility

Can the innovation

be used on a
trial basis?

Complexity

Does the innovation

fit the values and
experience of the
target market?

Is the innovation
difficult to
understand or use?
93

Customer Driven Marketing

Strategy
Creating Value For
Target Customers

How did we define market???

Market is defined as an individual or groups of
individuals with
- Wants to satisfy
- Money to spend
- Willingness to spend

There is always DIVERSITY

among buyers
Not all consumers who want cars want a
sedan
Not all buyers that use computers want the
same amount of memory or speed
Not all consumers buying cosmetics want a
premium range
Not all consumers buying milk want a thick
milk

Within the same general market there are smaller

groups of customers with different yet similar
wants, buying preferences, or product-use
behavior

 In some markets these differences are

relatively minor and the benefits sought by
consumers can satisfied with a single
marketing mix, also called as mass marketing
Utilities
In other markets, customers are unwilling to
make the compromises required by a single
marketing mix.
Consumption of Milk

The Key Implication is

Companies can not use one marketing mix to
serve all or multiple market segments
Due to their unique characteristics each segment
requires a different approach to be effectively
penetrated and captured by the companies

Most companies have moved away from mass

marketing and toward target marketingidentifying market segments, selecting one or
more of them, and developing products and
marketing programs tailored to each.

Cust. Driven Marketing Strategy

Involves the process of dividing market into
smaller groups (Segmentation), selecting one or
two of these groups to serve (Targeting) actually
differentiating your offer (Differentiation) and
then establishing a distinct position (Positioning)
of your product or service vs competition in the
chosen group

Why Target Marketing???

1. Helps identify marketing opportunities better
2. The seller can develop right offer for the right
market
3. The price, distribution & adv. Can be adjusted to
reach the consumers effectively
4. They can focus on buyers whom they have the
greatest chances to satisfying

Market Segmentation
1. Identify basis for
segmenting the market
& segment it
2. Develop profiles of
resulting segments

Market Positioning

5. Develop positioning for

target segments
6. Develop a marketing
mix for each segment

Market Targeting
3. Evaluate the
attractiveness of each
segment

4. Select the target

segment

Major Segmentation Methods

Geographic

Demographic

Psychographic

Behavioral

Requirement for Effective

Segmentation
To be useful segments must be;
Measurable

Substantial

Differentiable

Accessible

Actionable

Evaluating Market Segments

Two major factors
1.Overall attractiveness of the segment
2.Company Objectives & Resources
Over all attractiveness
- Size & Growth
- Structural Attractiveness
1, Intense segment rivalry
2, Threat of new entrants
3, Threat of substitute products
4, Bargaining power of buyers
5, bargaining power of suppliers

Selecting Target Market

Targeting Broadly
Undifferentiated (Mass) Marketing

Differentiated (Segment) Marketing

Concentrated (Niche) Marketing

Micromarketing (local or individual) Marketing

Targeting Narrowly

Selecting Target Market

Undifferentiated: marketing targets the whole
market with one offer
Mass marketing
Focuses on common needs rather than whats
different
The company designs a product and a marketing
program that will appeal to the largest numbers of
buyers

Selecting Target Market

Most modern marketers have strong doubts
about this strategy
Difficulties arise in developing a product or
brand that will satisfy all consumers.
Moreover, mass marketers often have trouble
competing with more focused firms that do a
better job of satisfying the needs of specific
segments and niche.

Selecting Target Market

Differentiated marketing targets several
different market segments and designs
separate offers for each
Goal is to achieve higher sales and stronger
position
More expensive than undifferentiated marketing

Selecting Target Market

Concentrated marketing targets a small share
of a large market
Limited company resources
Knowledge of the market
More effective and efficient

Selecting Target Market

Micromarketing is the practice of tailoring
products and marketing programs to suit the
tastes of specific individuals and locations
Local marketing
Individual marketing

Selecting Target Market

Local marketing involves tailoring brands and
promotion to the needs and wants of local
customer groups
Cities
Neighborhoods
Stores

Selecting Target Market

Individual marketing involves tailoring products
and marketing programs to the needs and
preferences of individual customers
Also known as:
One-to-one marketing
Mass customization
Markets-of-one marketing

Choosing a Targeting Strategy

Depends on:
Company resources
Product variability
Product life-cycle stage
Market variability
Competitors marketing strategies

Differentiation & Positioning

Product Position

The way the product is defined by consumers on

important attributes The place the product occupies in
the consumers mind relative to competition
Competitive Advantage
Advantage over competitors gained by offering
consumers greater value, either by providing more
benefits that justify higher price

Differentiation
Differentiation is the act of designing a set of
meaningful differences to distinguish the companys
offer from competitors offers
Product Differentiation
Services Differentiation
Personnel Differentiation
Image Differentiation

Which Differences to Promote?

Not all brand differences are meaningful or worthwhile

, a difference will be stronger if
Important

Profitable

Affordable

Preemptive

Criteria
For Determining
Which Differences
To Promote

Distinctive

Superior

Communicable

Selecting Overall Positioning

Strategy
Value proposition is the full mix of benefits upon
which a brand is positioned

Benefits

More

More

Price
Same

Less

More
for
More

More
for
Same

More
for
Less

Same

Same
for
Less

Less

Less
For
Less

Product Services & Branding

A Product is
Anything that can be offered to a market for attention,
acquisition, use, or consumption and that might satisfy
a want or need.
Includes:

Physical Objects
Services
Events
Persons
Places
Organizations
Ideas
Combinations of the above

Product Levels
Augmented Product
Installation
Packaging
Brand
Name
Delivery
& Credit

Quality
Level

Core
Benefit or
Service

Features

Design

Warranty
Actual Product

Core Product

AfterSale
Service

Types of Products
Consumer
Bought by final
consumers for
their personal
consumption or
use

Products

Industrial
Purchased for
further
processing or
for use in
conducting the
business

Types of Consumer Products

Consumer Durables
Consumer Non Durables

Types of Consumer Products

Convenience Products

Shopping Products

Buy frequently & immediately

Buy less frequently

Low priced
Mass advertising
Many purchase locations
i.e Candy, newspapers

Higher price
Fewer purchase locations
Comparison shop
i.e Clothing, cars, appliances

Specialty Products

Unsought Products

Special purchase efforts

New innovations

High price
Unique characteristics
Brand identification
Few purchase locations
i.e Lamborghini, Rolex

Products consumers dont

want to think about these products
Require much advertising &
personal selling
i.e Life insurance, blood donation

Types of Industrial Products

Materials
and
Parts

Capital
Items

Supplies
and
Services

Individual Product Decisions

Product Attributes
Branding

Packaging
Labeling
Product Support Services

Product Attributes
Product Quality

Ability of a Product to Perform Its

Functions; Includes Level &
Consistency

Product Features

Help to Differentiate the Product

from Those of the Competition

Product Style
& Design

Process of Designing a Products

Style & Function

Packaging
Activity of designing and
producing the container or
wrapper for a product.
Packaging used to just contain
and protect the product.
Packing now has promotional
value and marketers should:
Establish a packaging concept,
Develop specific elements of the
package,
Tie together elements to support
the positioning and marketing
strategy.

Labeling
Printed information
appearing on or with the
package.
Performs several functions:
Identifies product or brand
Describes several things
about the product
Promotes the product
through attractive graphics.

Competitive
Advantages
Sales
Tasks
Identifies

Packaging

Labeling

Describes

Product
Safety
Promotes

New Product Development

Marketing
Strategy
Concept
Development
and Testing

Idea
Screening

Idea
Generation

Business
Analysis

Product
Development

Test
Marketing

Commercialization