Download - Marketing Management Session I
MARKETING MARKETING MANAGEMENTMANAGEMENT
SUDHIR BHATNAGARSUDHIR BHATNAGAR
MARKETING MANAGEMENTMARKETING MANAGEMENTSession ISession I Overview of Marketing Functions & Concepts
Session II & IIISession II & III Elements of Marketing Management
Session IVSession IV Sales Management
Session VSession V Distribution Strategies & CSM
Session VISession VI Introduction to Market Research & its role
SESSION ISESSION I(Overview of Marketing Functions & (Overview of Marketing Functions &
Concepts)Concepts)
What isWhat is Market?Market?• Place ConceptPlace Concept – a convenient meeting place
where buyers & sellers gather together for exchange of goods.
• Area ConceptArea Concept – it is an economic concept. Any area providing for price-making forces to operate for exchange of goods becomes a market.
• Demand ConceptDemand Concept – a group of people having unmet needs, purchasing power to make their demand effective & will to spend their income to fulfil those needs.
The Market – Exchange The Market – Exchange processprocess
MARKET COMMUNICATIONSMARKET COMMUNICATIONS
BODY OFBODY OFSELLERSSELLERS
BODY OFBODY OFBUYERSBUYERS
FEEDBACKFEEDBACKINFORMATIONINFORMATIONSATISFACTIONSATISFACTION
DISSATISFACTIONDISSATISFACTION
MARKET -MARKET -
THE CIRCLETHE CIRCLE
OF EXCHANGEOF EXCHANGEFLOW OF FLOW OF
PRODUCTSPRODUCTSFLOW OF FLOW OF MONEYMONEY
Types of MarketsTypes of MarketsBased onBased on --
Selling areasSelling areas – local, national, international market.
Articles of tradeArticles of trade – cotton market, bullion market, steel market, agro products market etc.
Nature of exchange dealingsNature of exchange dealings – spot or cash market, futures or forward market.
Nature of goods sold Nature of goods sold – consumer good market or industrial goods market.
Period of dealingsPeriod of dealings – money market for short term funds or capital market for long term funds.
Nature & magnitude of sellingNature & magnitude of selling – whole sale market or retail market.
TYPES OF GOODS TRADED IN TYPES OF GOODS TRADED IN MARKETMARKET
PRODUCTSPRODUCTS
MANUFACTUREDMANUFACTUREDGOODSGOODS
INDUSTRIALINDUSTRIALGOODSGOODS
AGRICULTUREAGRICULTUREPRODUCEPRODUCE
NATURAL RAWNATURAL RAWMATERIALSMATERIALS
CONSUMERCONSUMERGOODSGOODS
INDUSTRIALINDUSTRIALGOODSGOODS
CONSUMERCONSUMERGOODSGOODS
INDUSTRIALINDUSTRIALGOODSGOODS
Convenience Convenience GoodsGoods
Shopping GoodsShopping Goods Specialty GoodsSpecialty Goods
1 Frequent 1 Frequent purchasespurchases
Demand search Demand search efforts in central efforts in central marketmarket
Goods have unique Goods have unique featuresfeatures
2 High 2 High replacement replacement raterate
Purchases can be Purchases can be postponedpostponed
Unusual shopping Unusual shopping behaviour is behaviour is neededneeded
3 Purchases in 3 Purchases in small small quantitiesquantities
Demand evaluation Demand evaluation & comparison on & comparison on basis of quality, basis of quality, style, price, style, price, suitability etc.suitability etc.
Special purchasing Special purchasing efforts are required efforts are required for preferred for preferred brandsbrands
4 Demand 4 Demand minimum efforts minimum efforts & time for & time for shoppingshopping
Do not need Do not need numerous shopsnumerous shops
Act as important life Act as important life style & imagesstyle & images
5 Must be 5 Must be available at available at nearest store. nearest store.
Fashion & service Fashion & service goodsgoods
Costly luxury goods.Costly luxury goods.
6 Branded low-6 Branded low-priced goodspriced goods
Branded goods are Branded goods are preferredpreferred
Brand, price & utility Brand, price & utility values are assessedvalues are assessed
Example: Example: daily daily utility items, utility items, grocery, vegetable grocery, vegetable – self service stores – self service stores are ideal for are ideal for purchases.purchases.
Clothing, furniture Clothing, furniture items, common user items, common user appliances – costly appliances – costly shopping goods shopping goods have declining sale have declining sale in deflationary in deflationary periodperiod
TV, Refrigerator, TV, Refrigerator, Washing Machine, Washing Machine, AC, Car, Scooter, AC, Car, Scooter, Motor Cycle etc. Motor Cycle etc.
COMPARISION BETWEEN VARIOUS COMPARISION BETWEEN VARIOUS CONSUMER GOODSCONSUMER GOODS
Convenience Convenience GoodsGoods
Shopping GoodsShopping Goods Specialty GoodsSpecialty Goods
1 Numerous outlets
Limited outlets Limited outlets
2 Quick sales turnover
Medium turnover Low turnover
3 Wide spread sales
Selective distribution
Exclusive distribution
4 Sale through wholesaler & retailers
Direct sale to retailer
Direct sale to retailer
5 Sales promotion & advertisement not very important
Sales promotion & advertisement very important
Sales promotion & advertisement essential
6 Packaging plays an important role in sales promotion
Packaging has minor role
Packaging has no role
METHODS OF MARKETING OF METHODS OF MARKETING OF CONSUMER GOODSCONSUMER GOODS
MARKETINGMARKETINGWhat is Marketing?What is Marketing? Marketing is a total system of business, an ongoing Marketing is a total system of business, an ongoing
process of:process of:
(1) DDiscovering & translating consumer needs & desires into product & services – through suitable planning
(2) CCreating demand for products & services – through promotion & pricing
(3) SServicing customers demand – through planned distribution system with the help of marketing channels
(4) EExpanding the market in face of keen competition
In short, modern marketing begins with the customer - not with product cost, sales or technological landmarks - & ends with the customer satisfaction & social well-being.
How do we define Marketing?How do we define Marketing? Marketing Covers –Marketing Covers –
SeekingSeeking – This is the first function of marketing. Purpose is to discover the customers & customers’ needs. Market opportunity is revealed through environmental analysis. MatchingMatching – – Customer demand is analysed in context of organizational resources & environmental limitations – competition, government regulations, prevailing economy status etc. ProgrammingProgramming – Formulate marketing program – marketing mix – covering product, price, promotion & physical distribution strategies.
On the basis of customer driven marketing approach & concept of strategy, Marketing can be defined as:
‘A system of integrated business activities designed to develop strategies & plans to the satisfaction of customers’ wants in selected market segment.’
SALIENT FEATURES OF MARKETINGSALIENT FEATURES OF MARKETING Marketing is both consumer oriented as well
as competition oriented.
It starts with customer & ends at customer by satisfying their needs.
It is the most important function of business management.
Long-term objective of marketing is profit maximization thro’ customer satisfaction.
It is an integrated process which is based on strategies & models.
It must deliver goods & services to customers’ satisfaction in exchange of money.
SCOPE OF MARKETINGSCOPE OF MARKETING
MarketMarket FunctionsFunctions
FunctionsFunctionsOf FacilitiesOf Facilities
FunctionsFunctionsof Physicalof PhysicalDistributionDistribution
FunctionsFunctionsof Exchangeof Exchange
1.1. Buying FunctionBuying Function
2.2. Assembling FunctionAssembling Function
3.3. Selling FunctionSelling Function
1.1. TransportationTransportation
2.2. Inventory ManagementInventory Management
3.3. WarehousingWarehousing
4.4. Material handlingMaterial handling
1.1. FinancingFinancing
2.2. Risk taking & insuranceRisk taking & insurance
3.3. StandardizationStandardization
4.4. After-sales ServiceAfter-sales Service
MARKETING MANAGEMENT - SYSTEM MARKETING MANAGEMENT - SYSTEM APPROACHAPPROACH
Feedback InformationFeedback Information
1.1. ProductionProduction2.2. FinanceFinance3.3. PersonnelPersonnel4.4. MarketingMarketing
ManagementManagementControlControl
1Inputs
CapitalPhysical Assets
PeopleInformation
2Processor
1.1. ProfitsProfits2.2. CustomerCustomer SatisfactionSatisfaction3. Social3. Social WelfareWelfare
4Objective
3Outputs
ProductsInformation
MARKETING MARKETING PROCESSPROCESS
ProductProductMarketing Marketing MixMix
Produc
Produc
tt
Distributi
Distributi
onon
Prom
otio
Prom
otio
nn
Price
PriceProducersProducers CustomersCustomers
Exchange something of valueExchange something of value
Market AnticipationMarket Anticipation
Goods Goods
FlowFlow
Goods Goods
FlowFlow
Market OfferingMarket Offering
Customer Demand thro’ Marketing Customer Demand thro’ Marketing researchresearch
Money FlowMoney Flow
Marketing Environment comprises of - - 1. Government 2. Competitors 3. Suppliers 4. Consumerism 5. Mass Media of Communications etc.
MARKETING FUNCTIONSMARKETING FUNCTIONS
Contactual – Searching for buyers & sellers.
Merchandising – Matching products to customer needs & desires (market requirement)
Pricing – Determine optimum price.
Promotion – Motivating the buyer to favour particular firm & its products.
Physical Distribution – Transportation, warehousing, inventory control etc.
CONCEPT OF MARKETINGCONCEPT OF MARKETINGSix distinct concept of ‘Marketing’ have evolved since the industrial revolution.
EXCHANGE ORIENTED CONCEPTEXCHANGE ORIENTED CONCEPT
PRODUCT ORIENTED CONCEPTPRODUCT ORIENTED CONCEPT
PRODUCTION ORIENTED CONCEPTPRODUCTION ORIENTED CONCEPT
SALES ORIENTED CONCEPTSALES ORIENTED CONCEPT
MARKETING OREINTED CONCEPTMARKETING OREINTED CONCEPT
SOCIAL MARKETING CONCEPTSOCIAL MARKETING CONCEPT
EXCHANGE ORIENTED – EXCHANGE ORIENTED – This is an old concept of marketing & primarily involves exchange of product & money between a seller & a buyer. Vital elements of modern marketing like marketing strategies, marketing mix, creative selling, advertising etc. are not given due importance in this kind of concept.
PRODUCT ORIENTED - PRODUCT ORIENTED - Management works on the concept that superior features, quality & performance of a product alone will create favourable response in customers. Over-emphasis of product excellence at times ignores several aspects of customer needs & desires.
PRODUCTION ORIENTED – PRODUCTION ORIENTED – Focus is on product performance & cost. Customer is attracted by maintaining low product price which is usually achieved by keeping production line narrow. This concept works only in ‘Sellers’ Market’ & not in ‘Buyers’ Market’.
SALES ORIENTED – SALES ORIENTED – Emphasis is laid on high pressure salesmanship, aggressive advertising, intensive sales promotion activities etc. to achieve high sales volume at times at the cost of customer satisfaction & service. This is generally adopted to sell less wanted goods.
MARKET ORIENTED – MARKET ORIENTED – In this the business philosophy is to make & sell what customer wants to buy. All business activities thus revolve round the primary goal of satisfying customer needs. Broadly the guidelines for adopting this concept are as follows: Customer OrientationCustomer Orientation – take marching
order from the market. Marketing Information SystemMarketing Information System – vital for
planning-action-control process of management.
Integrated Marketing ActivitiesIntegrated Marketing Activities – adopt system approach to integrate & coordinate all business activities to accomplish the set of objectives.
Dual ObjectiveDual Objective – ensure customer satisfaction & simultaneously maximize profit.
Benefits of Market-oriented Approach Benefits of Market-oriented Approach ––
If a business enterprise recognizes the If a business enterprise recognizes the market needs as paramount it can be assured market needs as paramount it can be assured of long term successof long term success..
Understanding market & changes in the Understanding market & changes in the market enables a firm to quickly capitalize on market enables a firm to quickly capitalize on market opportunities. This substantially market opportunities. This substantially reduces market risks alsoreduces market risks also..
Customer is appropriately benefited as his Customer is appropriately benefited as his needs are given top considerationneeds are given top consideration..
Greater attention is given to product planning Greater attention is given to product planning & development which leads to quality product & development which leads to quality product being presented to the customerbeing presented to the customer..
Demand side of business activity is given higher Demand side of business activity is given higher importance and this drives the marketer to lay importance and this drives the marketer to lay more emphasis on research & innovation efforts. more emphasis on research & innovation efforts. This benefits the customer.This benefits the customer.
System approach enables the top management System approach enables the top management to have an integrated view of entire business to have an integrated view of entire business activities which in turn allows them to exercise activities which in turn allows them to exercise better control.better control.
By harmonizing business activities with By harmonizing business activities with customer needs & interests of the society, firms customer needs & interests of the society, firms can maximize profit.can maximize profit.
Market-oriented business practice has Market-oriented business practice has introduced the marketing information & research introduced the marketing information & research as integral part of marketing process. This has as integral part of marketing process. This has led to understanding the customer needs more led to understanding the customer needs more explicitly. explicitly.
Selling Vs MarketingSelling Vs Marketing PerceptionPerception Whereas in market-oriented concept, Whereas in market-oriented concept,
management has the responsibility to create management has the responsibility to create value-satisfying goods & services, in selling value-satisfying goods & services, in selling concept, under mass production, all efforts are concept, under mass production, all efforts are focused on production & greater emphasis on focused on production & greater emphasis on sales to generate profits. Contrast between sales to generate profits. Contrast between selling concept & marketing concept: -selling concept & marketing concept: -
Selling focuses on seller’s needs, marketing on buyer’s needs.
Selling is pre-occupied with seller’s need to convert product into cash; marketing goes with the idea of satisfying customer’s needs by means of the product & whole cluster of things associated with creating, delivering & finally consuming it.
Selling aims at profit thro’ sales volume; marketing aims at profit thro’ serving customer demands.
ProductsSomething that has to be sold
to the customer
Selling &Promoting
Profitsthrough
Sales Volume
ProductsTo fill in
Customer needsAs per their choice
IntegratedMarketing mix
Profitsthrough customer
satisfaction
FOCUS MEANS OBJECTIVES
FOCUS MEANS OBJECTIVES
(A) THE SELLING (A) THE SELLING CONCEPTCONCEPT
(A) THE MARKETING (A) THE MARKETING CONCEPTCONCEPT
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SOCIAL MARKETING CONCEPT –SOCIAL MARKETING CONCEPT –
It is a broadened marketing concept. In this the management balances three crucial factors –
Customer demand satisfaction.
Public interest (social awareness)
Profitability
This concept is based on following This concept is based on following premisespremises – The marketer will fulfill customer demand &
also contribute to enrichment of quality of life.
Marketer will not offer a product to customers if it is not in best interest of customers.
Marketer will offer long-run consumer & public welfare activities.
Integrated marketing plans & programs will duly consider consumer citizen demand. These should a healthy mix of corporate needs & social welfare encompassing sustained economic growth without disturbance to social & ecological balances.
ESSENCEESSENCEMarketing Concept - Marketing Concept - Under marketing concept there is a shift (1) from
product/ business to customer (2) from production to market (3) from supply to demand (4) from sale volume to profit (5) from more selling to customer satisfaction (6) from internal orientation to external orientation.
Supply becomes the function of demand. Demand is the controlling factor & demand analysis becomes the foundation of market functions.
There are four elements of demand management: (1) demand analysis based on market research (2) product mix based on demand (3) promotion mix to stimulate demand (4) distribution mix to service demand.
This concept is applicable to any organization – profit/non-profit.
It can eliminate marketing myopia.