nature and scope of marketing

Module 1: Nature and Scope ofMarketing

3. Global Markets and Marketing

2. The Dynamic Marketing Environment

1. The Field of Marketing

1. The Field of Marketing

Introduction

• Introduction - Self • Introduction – Students

– Name, Roll No– Educational background – Degree,

College– Home Town– Photograph– Why came to this college– Career aims and objectives

• Group Formation

Who makes what?

List B. CompaniesITC, Godrej, BHEL, Videocon, Voltas, HP, Britannia, L&T,Atlas, Bata, HLL, Wipro, Microsoft, P&G

List A. Products1. Air Conditioners2. Hamam soap3. Washing machines4. Power generators5. Sunsilk shampoo6. Lux Soap7. Safety Locks8. Dove9. Refrigerators10.Laptops

11. Biscuits12. Cement13. Office furniture14. Shoes15. Bicycles16. Computer Software17. Computer Hardware18. Cooking Oil19. Tooth Paste20. Detergent Powder

What does a Marketer Do?

What does a Marketer Do?

Why Bike(Analyze Needs)

Why Bike(Analyze Needs)

Bike Type (Product Plan)

Bike Type (Product Plan)

Which people? (Segment)

Which people? (Segment)

What Quantity? (Demand Forecasting)

What Quantity? (Demand Forecasting)

Where to Sell? (Distribution)

Where to Sell? (Distribution)

What to Charge? (Price)

What to Charge? (Price)

What & how to inform? (Promotion)

What & how to inform? (Promotion)

Who all will compete (Analyze Competitors) Who all will compete

(Analyze Competitors)

What if problem?(Warranty)

What if problem?(Warranty)

Marketing, Defined

Business activities designed to

PlanPrice

PromoteDistribute (Place)

Want-satisfying products to target markets

to achieveorganizational objectives

Business activities designed to

PlanPrice

PromoteDistribute (Place)

Want-satisfying products to target markets

to achieveorganizational objectives

Exchange – at the heart of Marketing

Between Organizations and/or Individuals

Between Organizations and/or Individuals Marketers and MarketsMarketers and Markets

Exchange – the essence of MarketingExchange – the essence of Marketing

Tangible/ Intangible goods, Services, Ideas,

places, people

Tangible/ Intangible goods, Services, Ideas,

places, people

Conditions of Exchange

Voluntary participation Voluntary participation 2 or More parties2 or More parties

Each has something of value for the other partyEach has something of value for the other party

Parties must communicateParties must communicate

Marketing Defined

Business activities designed to

PlanPrice

PromotePlace (Distribute)

Want-satisfying products to target markets

to achieveorganizational objectives

Business activities designed to

PlanPrice

PromotePlace (Distribute)

Want-satisfying products to target markets

to achieveorganizational objectives

Stages of the Evolution of Marketing

Promote throughSales and Advertising

Promote throughSales and Advertising

Sales-Orientation Stage

Sales-Orientation Stage

Increase SupplyProduce EfficientlyIncrease Supply

Produce EfficientlyProduct-Orientation

StageProduct-Orientation

Stage

Market-Orientation Stage

Market-Orientation Stage

Long-Run Customer Satisfaction

Long-Run Customer Satisfaction

How Should a Business Be Defined?

KodakWe make

Cameras and FilmsWe help Preserve

Beautiful Memories.

HLL We make and sell Soaps & Detergents

??

IBM We make Computer

??

SSIM We provide MBA Degree

??

Company Product orientedanswer

Market orientedanswer

Marketing Concept

Customer Satisfaction & Organizational

Success

A business philosophy that makes Customer Satisfaction as focal point of all

the activities of the business

A business philosophy that makes Customer Satisfaction as focal point of all

the activities of the business

CustomerOrientation

&Organization'sPerformanceObjectives

CoordinatedMarketingActivities

Implementing the Marketing Concept (Customer

Orientation)

Mass CustomizationProduce products with variety and

uniqueness

RelationshipsCustomer Relationship Management

(CRM)

Implementing the Marketing Concept (Coordinated Marketing

Activities)

Value CreationBenefits vs. Costs

QualityTotal Quality Management

Implementing the Marketing Concept

(Organizational Objectives)

Societal Marketing ConceptFulfill firm’s social responsibility

Performance MetricsReturn on the marketing investment

Marketing Program (A Market)

People or

Organizations

People or

Organizations

Moneyto

Spend

Moneyto

Spend

Willingnessto

Spend

Willingnessto

Spend

Needs to

Satisfy

Needs to

Satisfy

MarketMarket

Marketing Program (Market Segments)

Segments are subgroups of the market with similarities

Segments are subgroups of the market with similarities

WantsWants

ProductUse

ProductUse

BuyingPreferences

BuyingPreferences

Marketing Program (Target market)

MarketSegment

A

MarketSegment

C

MarketSegment

B

TARGET MARKET

A market segment at which the firmA market segment at which the firm directs its marketing programdirects its marketing program

A market segment at which the firmA market segment at which the firm directs its marketing programdirects its marketing program

Marketing Program (Position)

TARGET MARKET

Strategies and tactics to establish a unique positionStrategies and tactics to establish a unique position in the prospect’s mind so the product is in the prospect’s mind so the product is viewed in a distinctive and attractive way viewed in a distinctive and attractive way

Strategies and tactics to establish a unique positionStrategies and tactics to establish a unique position in the prospect’s mind so the product is in the prospect’s mind so the product is viewed in a distinctive and attractive way viewed in a distinctive and attractive way

DISTRIBUTION PROMOTION

PRODUCT PRICE

Ethics and Marketing

TRUSTBuilds

BusinessRelationships

CODE OF

ETHICS

CONFLICTSChallenges fromconflicting goals

ETHICSStandards

accepted by asociety

Importance of Marketing

Personally

Organizationally

Domestically

Globally

Creating Utility

Form utility Place utility

Time utility Information utility

Possession utility

Further references

• Visit www.nordstrom.com to check how they have been able to restore their position by further innovation.

• Visit www.harleydavidson.com to check what they do to work out a long term relationship with customers.

• Visit www.johndeere.com to check how they implement mass customization.

• Visit www.tatamotors.com and check how the company create value.

Key Terms and Concepts• Exchange• Marketing • Product-Orientation Stage• Sales-Orientation Stage• Market-Orientation Stage• The Marketing Concept• Customer Relationship Management

(CRM) • Mass customization • Total Quality Management (TQM) • Value• Societal Marketing Concept• Market • Market segments • Target market• Positioning • Marketing mix • Ethics • Creating Utility

2. The Dynamic Marketing Environment

Levels of External Forces

Macro LevelMacro Level

Influences that affect all firmsInfluences that affect all firms

Micro LevelMicro Level

Influences that affect a particular firmInfluences that affect a particular firm

External Macroenvironment Forces

Technology

Politicaland Legal

Forces

Social &CulturalForces

NaturalEnvironment

Competition

Company’sMarketingProgram

Demo-graphics

Economic

conditions

Demographics

People MakeMarkets

People MakeMarkets

DistributionDistribution GrowthGrowth

SizeSize

Characteristics of Populations

Characteristics of Populations

Key Demographics of India

>1 billion Population

growing @ 2%

>1 billion Population

growing @ 2%

Literacy 65%(1951 – 17%)

Literacy 65%(1951 – 17%)

Over 3.5 MillionEngineers &

Scientists

Over 3.5 MillionEngineers &

Scientists

Life Expectancy>62 Years

Life Expectancy>62 Years

2nd largest Market

(next to China)

2nd largest Market

(next to China)

Economic Factors

InflationInflationInterest Rates

Interest Rates

Stage of the Business

Cycle

Stage of the Business

Cycle

People withMoney to Spendand Willing to

Spend it

People withMoney to Spendand Willing to

Spend it

Key Economic Facts (Indian Environment)

Significant FDI,Vibrant CapitalMarket, High FE Reserve

Significant FDI,Vibrant CapitalMarket, High FE Reserve

Inflation(Moderate – High)

Inflation(Moderate – High)

Interest Rates(High)

Interest Rates(High)

EconomyGrowing@8-9.5%

EconomyGrowing@8-9.5%

Competition

Rivals for Customers’

Limited Buying Power

Rivals for Customers’

Limited Buying Power Substitute

ProductsSubstitute Products

Every Company

Every Company

BrandCompetition

BrandCompetition

Differential AdvantageDifferential Advantage

Social and Cultural Forces

People MakeMarkets

People MakeMarkets

BeliefsBeliefs

Socio-culturalPatterns

Changing Quickly

Socio-culturalPatterns

Changing Quickly

ValuesValuesLifestylesLifestyles

Key socio-cultural facts of India

7 Religions17 Languages7 Religions

17 Languages

Many Cultures, Tradition bound (Changing fast due

to exposure to lifestyle, Media, Globalization)

Many Cultures, Tradition bound (Changing fast due

to exposure to lifestyle, Media, Globalization)

More Health Conscious, Working Harder/Longer,

Premium on time

More Health Conscious, Working Harder/Longer,

Premium on time

Changing role of Women (Housewife-Employed women)

Changing role of Women (Housewife-Employed women)

Political and Legal Forces

Type of Governance

andDirection

Type of Governance

andDirection

GovernmentalRelationship

with Industries

GovernmentalRelationship

with Industries

Monetaryand

Fiscal Policies

Monetaryand

Fiscal Policies

Legislation - Social & Related

to Marketing

Legislation - Social & Related

to Marketing

Key facts of India's Political & Legal Environment

Political consensuson

Economic Growth

Political consensuson

Economic Growth

EconomicReforms, Moving rapidly to Market

economy

EconomicReforms, Moving rapidly to Market

economy

To operate within legal

framework of laws related to

Corporate affairs,Consumer protection,Employee protection,

MRTP etc

To operate within legal

framework of laws related to

Corporate affairs,Consumer protection,Employee protection,

MRTP etc

Key facts of India's Natural Environment

Rich naturalresources

(iron, coal, rareminerals,

ocean wealth)

Rich naturalresources

(iron, coal, rareminerals,

ocean wealth)

Tropical climate favours

agriculture and industry

Tropical climate favours

agriculture and industry

Good rainfall,Has strong

network of rivers

Good rainfall,Has strong

network of rivers

In energy,costs are

constantlyon rise

In energy,costs are

constantlyon rise

Technology

Affects HowMarketing isCarried Out

Affects HowMarketing isCarried Out

Altering Existing

Industries

Altering Existing

Industries

Impacts lifestyles, consumption patterns,

economic well-being

Impacts lifestyles, consumption patterns,

economic well-being

StartingNew

Industries

StartingNew

Industries

Stimulates Marketsand

Other Industries

Stimulates Marketsand

Other Industries

External Microenvironment of a

Company’s Marketing Program

Company’sMarketingProgram

MarketingInterme-diaries

TheMarket

MarketingInterme-diaries

Suppliers

Value Chain

Internal Environment

Internal Environment Affecting aCompany’s Marketing Activities

MarktgIntrmdries

MarketMarktg

IntrmdiariesMarket

Tech

nolo

gy

Pol

itica

lan

d Le

gal

Forc

es

Social &CulturalForces

Natural

EnvironmentCompetitio

n

Demo-graphics

Economic

conditions

Firm’s Marketing Environment

Key Terms and Concepts

•Environmental monitoring. •Demographics.•Economic Environment •Business Cycle •Inflation. •Interest rates •Differential advantage •Suppliers. •Marketing intermediaries•Channels of distribution.•Value Chain

3. Global Markets and Marketing

Lesson Objectives

• The significance of marketing to firms and countries

• The attractiveness of foreign markets• The challenges of designing international

marketing strategies• The alternative organizational structures• The international marketing mix issues

and concepts

Reasons for International Trade

Access to products

Comparative Advantage

Role of Export Trade in Selected Countries

INSERT TABLE 3.1

International Trade

Balance of PaymentsAccounting record of all

Transactions between countries

Trade BalanceDifference between imports and exports

Factors Affecting International Trade

TechnologyConsumer Preferences

Trade Barriers

Subsidized Industries

Tax Structure

Marketing Capability

Why International Marketing?

PotentialDemand

MarketSaturation

CustomerExpectations

Strategic Planning for International Marketing

RegionalStrategy

LocalStrategy

Global Strategy

Market Demand

Number of

people

Buying behavior

Ability to buy

Social and Cultural Environment

Family

Customs and Behavior

Education

Language Differences

Economic Environment

Infrastructure

Competition

Level of Economic Development

Political and Legal Forces

Trade Barriers

• Tariff• Import quota• Local-content law• Local operating laws

• Standards and certification

• Boycott

Political and Legal Forces

Trade AgreementsTrade AgreementsTrade AgreementsTrade AgreementsWorld Trade Organization

European Union

North American Free Trade Agreement

Asia-Pacific Economic Cooperation forum

Association of Southeast Asian Nations

Common Market of the South

WTO

EU

NAFTA

APEC

ASEAN

MERCOSUR

Structures for Operating in Foreign Markets

ExportingDirectly,or throughImport-ExportMiddlemen

CompanySalesBranches

LicensingForeignProducts

ContractManufact-uring byForeignProducers

Joint VenturesandStrategicAlliances

Wholly OwnedSubsidia-ries

MultinationalCorporat-ions

Lowinvolvementabroad

Highinvolveme

ntabroad

Designing the Marketing Mix

Market Research•Data availability•Infrastructure, etc

ProductPlanning

•Product extension•Product adaptation•New invention•Branding•Labeling

Pricing

•Cost Plus•Dumping•Countertrade or Barter

Distribution Systems

•Export/Import Agents•Export Merchant•Gray Marketing

Advertising

•Language•Format•Media etc

Key Terms and Concepts

• Balance of Payments

• Trade balance

• International marketing

• Global Strategy

• Regional strategy

• Local strategy

• Infrastructure

• Trade barriers

• Tariff

• Import quota

• Local-content law

• Local operating laws

• Standards and certification

• Boycott

• World Trade Organizations

• European Union

• North American Free Trade Agreement

Key Terms and Concepts

• Asia-Pacific Economic Cooperation forum

• Association of Southeast Asian Nations

• Common Market of the South

• Exporting

• Export merchant

• Export agent

• Company sales branch

• Contracting

• Licensing

• Contract manufacturing

• Franchising

• Direct foreign investment

• Joint venture

• Strategic alliance

• wholly owned subsidiary

• Multinational corporation

Key Terms and Concepts

• Trademark infringement

• Dumping

• Price differential

• Foreign exchange

• Countertrade or barter

• Cartel

• Gray marketing

• Bribes