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.