Introduction to Marketing

Definition of Marketing; the Marketing Process

Understanding the market place and customer needs
Customer needs, wants, and demands; Market offeringsProducts, Services and Experiences
Customer Value and satisfaction;
Exchanges & Re;lationships; Markets.

 Marketing is about identifying and

meeting human and social needs.
Marketing is a organizational function
and a set of process for creating,
communicating, and delivering value
to customers and for managing
customer relationships in ways that
benefit the organization and its stake
holders

Marketing Process

Right decisions
Product features into new products
Packaging
Pricing
Introductory offer
Seasonal products needs different launches
Target markets and Target customers to sell
Ad spend and measurement

What is Marketed
Goods-Automobiles, TV, Machine Tools ,Machines, Industrial
Chemicals , Watches, Cosmetics
Services- Car Rentals, Beauticians, Maintenance People,
Accountants, Bankers, Lawyers, Management Consultants,etc
Events-sport events, Music shows, company anniversaires,etc
Experiences-Amusments park
Persons- Celeberity marketing Artists, Musicians,
Places-Tourism
Properties Organizations-Universities, Museums, NGOs
Information-

Understanding Market Place &

Customer Needs

Nirma
Tata Ace
Xerox-FSMA
Akai
Smart Phones

STRUCTURE OF FLOWS IN A
MODERN EXCHANGE ECONOMY

A SIMPLE MARKETING
SYSTEM

RURAL MARKETING
Rural Marketing : any marketing activity in which
one dominant participant is from a rural area.
Rural Market offer immense potential for market
expansion and growth
Growth rate 4% for the last 20yrs but 5% in next
decade.
Eg. FMCG estimate Rs.6500 billion, Consumable
durables 500 billion, Agriculture inputs 4500 billion,
automobiles 800 billion, totalling Rs.12.300 billion.
By 2017 rural spending in household would reach
2008 of Urban as per McKinsey Global Institute
forecast.

Customer Needs Wants and

Demands
Needs are the basic human
requirements. These needs become
wants and when directed to specific
objects that might satisfy the need.
Hamburgers, French Fries in West
and Chappatis rice, curry in India
Wants become Demands.

Targets Markets, Positioning, and

Segmentation
Target Markets Rural or Urban, Age, Income
criteria, Job specific, etc. Eg, Volvo, Scorpio
Offerings and Brands: Companies addresses needs
by putting forth Value Proposition
A brand is an offering from a known source-eg
MdDonalds, Godrej, Xerox,
Value And Satisfaction: The offering will be
successful if it delivers value and satisfaction to the
target buyer
Primarily combination of quality, service, and price
(qsp) called the Customer Value Tirad.

Market Channel
Communication Channel- Delivers
and receive messages from target
customers
Distribution Channel
Service Channel

Relationship Marketing
4 Key constituents
Customers, employees, marketing
partners, members of financial
community
Nike
Tupperware

Analyse Marketing
Environment

Sales Information System- MIS

Order to payment cycle
FSMA process of billing
Territory Management
Electricity Billing
Wrong conclusion Eg Mustang

 Data Bases and Data Mining, Data

Warehousing
Use of Data Base:
For insurance , Credit Cards.
Samsung different for different
products and segments

Market Intelligence System

Motivate distributors, retailers and
other intermediaries to pass along
important inteligence.
Attend competitors Road Shows,
shops, example of fighting Cannon
by Xerox
Governemnt data sources
Purchase of Data from agencies

Analyse Macro Environment

Needs and Trends
A trend is a direction of sequence of
events that has some momentum and
durability. Trends are more predictable
and durable than fads.
A Fad is short lived and without social,
economic and political significance.
Eg: for Fitness among youth more so
under 30 risen steadily over years.

 Mega Trends are larger social,

economic, political and technological
changes are slow to form and once in
place they influence us for 10 years
or longer.
Eg: Boom in It, large number of
youths are earning good and spend
and form a consumption group

Identifying the Major Forces

The Demographic Environment

World wide population growth
Population age mix:
Eg Mobile phones, Airtel prepaid, Titan
Fasttrack, MTV, Channel V etc for youth
Economic environment:
Buying Power in an economy depends on
current income, prices, savings, debt
and credit availability

 Social Cultural Environment:

Factors: Improvement in earnings

Exposure to Foreign media,

foreign travel education levels,
emergence of new job oppurtunities (
IT, Call centres, retailing.
Eroding of scooters

Expenditure
1999
2003
Grocery
44%
41.1%
Savings/invest
14%
4.1%
Eating out
8%
10.8%
Personal care
6%
7.6%
Consumer spend 50,000 million for 4
years period gives the magnitude
and direction in consumption

Natural Environment:
Technological Environment:
Political and Legal environment:
Waste management, Water
resources,
Laws protecting consumers, business
houses

Market Segmentation-Chap
8
Coverage cannot be done with all
customers in total. Divide the whole
market into groups of consumers or
segments with distinct needs and
wants. This decision requires
customer understanding and
strategic thinking. It is important to
understand each segment carefully
as each is different and unique.
Eg: Airlines in recent times.

 Process: 1.identify segments depending

upon your products.

2.Each segment requires

separate selling, Marketing activities,
Products.
A market segment consists of a group of
customers who share similar set of needs
and wants.
Market shows no Natural segments.
Homogeneous Preferences exist

Different types of Marketing

Niche Marketing
Local Marketing
Individual Marketing

Niche Marketing
Customers have a distinct set of
needs and pay a premium to the
brands. It is a narrowly defined
consumer group. It is small in size
but more in profit and growth.
Risk: Alternative customer base not
there.
Eg: Ezee liquid detergent from Godrej

Tv channels like Aastha, sports

channel,

 Face book.
Revolution Clothing Pvt ltd
Internet Niching: setting a shop on
the internet choose a hard to find
product that customers touch and
see

Local Marketing
Target Markets directed to local
needs and wants of consumer groups
in trading areas or neighborhoods.
Eg: Banks in Kerala (NRI branches)
SpiderMan 3 released in five different
languages in India
Bharath Matrimony has regional Web
sites in India .Risk: Brand might loose
overall image

Individual Marketing
Customization
Difficult to implement. Eg: Rolles
Royce,
Asian Paints, Berger Paints.
Risk: Customers do not know what
they are ordering until they see the
actual products

How Segmentation is done

Geographic: South, West, North, East India

City and Rural and Urban

Eg: In places like Bangalore, ooty
Aircoolers are used whereas in Hot and
humid palces ACs are required.
Invertor in places with power cuts
Coffee in South India and Tea in other
states
MTR foods (Packed)

Demographic: Age group

Married, Single,
Recent marriage, Children
Gender: Scooty, Dove
Income : Nirma, Mobiles,
Occupation, Education,
Psychographic: Culture oriented, Sports
oriented etc
Behavioral: Occasions, regular, first time user,
regular user, readiness stage to buy

Pricing and Strategies- Chap

14
Price is the one element of the
marketing mix that produces the
revenue. It is the element to adjust in
marketing programmes. It also
communicates the intended value to
customers.
A well designed product can
command premium and reap big
profits.
Eg; Gillete

How the pricing is done

In small companies Boss does the pricing
In large companies is done by division and
product line managers.
Factors that influence Pricing are demand,
inventory, process, post sales, recurring
revenue, type of customers and segments,
new launches compared to competition.
Product mix as different product determines
different profits. Bundle it. Give discounts in
terms of products which have perceived value

 Bulk pricing to motivate channel to buy more

so that inventory cost and transportation is
reduced and benefit passed on.
Pricing to increase market share to increase
demand.
Reduce expenses to reduce costs and
eventually price comes down.
Price: cost of the product+Operational
costs+transportation costs+hiden costs+
replacements costs + warranty costs+ marked
profit.