MARKETING

MANAGEMENT

UNIT I

Course Code: MBA 111

By: Dr. Pratibha Rai
 MARKETING

MARKET: Marketers know that their product or service

cannot appeal to everyone. To do their job, they look for
people who might have an interest in or a need for their
product. They also look at people who could pay for their
product.

“All these people who need and who have the ability to
purchase a given product are called a market.”

■ You could be part of the market for a budget mobile

phone, but not be part of the market for an expensive
car. Even though you may want an expensive car, you
may not have the means to buy one.
CONSUMER VERSUS
INDUSTRIAL MARKETS

CONSUMER VERSUS INDUSTRIAL MARKETS: A

market can be described as a consumer market or an
industrial market.
■ The consumer market consists of consumers who
purchase goods and services for personal use.
■ The industrial market or business-to-business (B-to-B)
market includes all businesses that buy products for use
in their operations.
The individual consumer buys goods and services for his or her own use, for the use of the
household, or as a gift for a friend. In each of these contexts, the products are bought for final
use by individuals.
Industries/Organizations purchases goods and services in order to: [1] Produce other goods
or services [2] Resell them to other organizations [or] to individual consumers [3] Help
manage and run their organization.
For Example-
[1] Starbucks Coffee purchases coffee beans, brewing equipment, and paper cups in order to
produce its products.
[2] The company purchases coffee beans to resell to individual consumers and other
organizations.
[3] Starbucks purchases office equipment, and cleaning supplies etc. to keep the organization
running smoothly.
WHAT PRODUCT “Goods, service, place, people,
experience or idea etc. offered by an
MARKETERS OFFER? organization are examples of market
offerings.”
Goods: Tangible products such as bath soap, automobiles, smart
phones
Services: Going to the dentist, banking, airline services
Place: Gujarat Tourism 'Khushbu Gujarat Ki' campaign
People: Reading books by certain authors, seeing movies or
TV shows starring certain actors, an attending concerts featuring
favorite bands
Experience: Bungee Jumping for example
Idea: The Indian Association for Blind
CONCEPT OF NEEDS-
WANTS-DEMANDS

The most basic concept underlying marketing is that of

human needs.

NEED: Human needs are states of felt deprivation. It indicates a

perceived lack of something. It bringsabout awareness in human
being that there is something that is required but not in
possession.
WANTS
Wants are the form human needs take as they are shaped by culture and
individual personality.It is the specific satisfier of the ultimate need.
CONCEPT OF NEEDS-
WANTS-DEMANDS

DEMANDS

Demand is want backed by buying power. The demand for a given

product is thus a function of need, wants and the purchasing power.
A primary demand is the total demand of the goods with different
names and is manufactured by different firms which fulfil the similar
needs. The secondary demand is more specific and includes demand
for a firm's product or brand.
 MARKETING
“Exchange is traditionally defined as the process of obtaining something of
EXCHANGE value from someone by offering something in return; this usually entails
RELATIONSHIP obtaining products for money in marketing.”

For an exchange to take place, following conditions must

exist:

■ Two or more individuals/organizations must participate.

■ Each party must possess something of value that the other party desires (for
example, cash for a product).
■ The parties to the exchange must be able to communicate with each other to
make their ‘something of value’ available.
■ Each party must be free to accept or reject the exchange.
 MARKETING DEFINED

Marketing is defined by the American Marketing Association (AMA) as:

“The activity, set of institutions, and processes for creating, communicating, delivering, and
exchanging offerings that have value for customers, clients, partners, and society at large.”

If you read the definition closely, you see that there are four components, of marketing:

■ Creating: The process of collaborating with suppliers to create offerings that have value.
■ Communicating: Broadly, describing those offerings
■ Delivering: Getting those offerings to the consumer in a way that optimizes value.
■ Exchanging: Trading value for those offerings.
Philip Kotler:
"Marketing is the science and art of exploring,
creating, and delivering value to satisfy the needs of a
target market at a profit.“
Peter Drucker:
"The aim of marketing is to know and understand the
customer so well the product or service fits him and
sells itself.“
E. Jerome McCarthy (4 Ps of Marketing):
"Marketing is the identification, selection, and
development of a product, the determination of its
price, the selection of a distribution channel to reach
the customer's place, and the development and
implementation of a promotional strategy."
Evolution of
Marketing
Philosophies

Tracing the Journey of

Marketing Concepts
 Production Orientation
The Era of Production-Centric Focus

Characteristics:
• Emphasis on production efficiency and cost reduction.
• Focus on mass production to meet demand.
• Limited consideration for customer preferences or feedback.

Key Motto:
"Produce as much as you can because customers will buy what is available."
 Product Orientation
The Era of Product-Centric Focus

Characteristics:
• Focus on product quality and features.
• Belief that a superior product will naturally attract customers.
• Minimal marketing efforts beyond product development.

Key Motto:
"Build the best product, and customers will seek it out."
 Sales Orientation
Persuading Customers to Buy

Characteristics:
• Aggressive sales techniques to push products onto customers.
• Heavy reliance on promotions and advertising.
• Short-term focus on achieving sales targets.

Key Motto:
"Sell what we have, not what the customer wants."
 Marketing Orientation
The Rise of Customer-Centric Marketing

Characteristics:
• Shifting focus from products to customers' needs and wants.
• Market research to understand customer preferences and behavior.
• Delivering customer value through product customization and satisfaction.

Key Motto:
"Know your customers and create products that fulfill their needs."
 Societal Marketing Orientation
Balancing Profit and Societal Welfare

Characteristics:
• Considering societal welfare and environmental concerns in marketing decisions.
• Promoting products and services that benefit society.
• Demonstrating corporate social responsibility.

Key Motto:
"Create value for customers while ensuring the well-being of society."
 Relationship Marketing
Fostering Long-Term Connections

Characteristics:
Building and maintaining strong customer relationships.
Focus on customer retention and repeat business.
Personalized interactions and customer loyalty programs.
Key Motto:
"It's not just a transaction; it's about nurturing enduring relationships."
 Digital Marketing Era
Adapting to the Digital Age

Characteristics:
• Leveraging technology for targeted and data-driven marketing.
• Embracing social media, email marketing, and online advertising.
• Enhanced customer engagement and brand reach.

Key Motto:
"Utilize digital platforms to connect and engage with customers."
 Holistic Marketing
The Integrated Approach

Characteristics:
• Combining traditional marketing strategies with digital marketing.
• Focusing on the entire customer experience and journey.
• Aligning all aspects of the business for a cohesive marketing approach.

Key Motto:
"Integrate all marketing efforts to create a seamless customer experience."
 Nature of Marketing
Embracing the Dynamic and Multi-faceted Aspect of Marketing

Dynamic Nature:
• Marketing strategies constantly evolve to keep up with changing consumer
behavior and market trends.
• Continuous innovation is essential to stay competitive and relevant.
Integrated Approach:
• Marketing efforts encompass various elements, including product development,
pricing, promotion, and distribution.
• Collaboration between departments is crucial to deliver a cohesive customer
experience.
Customer Interaction:
• Engaging with customers through different touchpoints to understand their
preferences, feedback, and concerns.
• Building strong customer relationships to foster loyalty and repeat business.
 Scope of Marketing
Exploring the Vast Horizons of Marketing

Product Marketing
Positioning and Promoting Products for Success
Scope:
• Developing new products or enhancing existing ones to meet customer needs.
• Creating effective product marketing strategies to reach the target audience.
 Scope of Marketing
Exploring the Vast Horizons of Marketing

Product Marketing
Positioning and Promoting Products for Success
Scope:
• Developing new products or enhancing existing ones to meet customer needs.
• Creating effective product marketing strategies to reach the target audience.
Digital Marketing
Leveraging the Power of the Digital Age
Scope:
• Utilizing online platforms to connect with customers and drive brand awareness.
• Implementing digital marketing strategies, such as social media, email marketing,
and search engine optimization (SEO).

Branding and Identity

Building a Lasting Impression
Scope:
• Creating and maintaining a strong brand identity that resonates with the target
market.
• Developing branding strategies to differentiate from competitors and build brand
loyalty.
Customer Relationship Management (CRM)
Nurturing Customer Connections
Scope:
• Building long-term relationships with customers through personalized
interactions.
• Implementing CRM systems to track customer behavior and preferences.

Market Research and Analysis

Making Informed Decisions
Scope:
• Conducting market research to identify market trends, consumer behavior, and
competitor strategies.
• Analyzing data to make data-driven marketing decisions.
International Marketing
Expanding Across Borders
Scope:
• Identifying and entering new international markets to expand the customer base.
• Adapting marketing strategies to cater to diverse cultural and regional
preferences.

Green Marketing
Sustainability and Social Responsibility
Scope:
• Integrating environmental and social considerations into marketing strategies.
• Promoting eco-friendly products and responsible business practices.
 Importance of Marketing

Creating Customer Building Brand Increasing Sales

Market Expansion:
Value: Awareness: Making and Revenue:
Reaching New
Understanding Your Mark in the Driving Business
Horizons
Customer Needs Market Growth

Customer
Competitive Product Effective
Retention and
Advantage: Development and Communication:
Loyalty: Fostering
Standing Out from Innovation: Staying Reaching Your
Long-Term
the Crowd Ahead of the Curve Audience
Relationships

Reputation Market Research Embracing Digital

Management: and Analysis: Marketing:
Shaping Public Informed Decision- Navigating the
Perception Making Digital Landscape
Marketing Mix - The 4 Ps

The Fundamental Elements of

Marketing Strategy
 Product
Creating and Positioning Winning Products

Definition:
The product element of the marketing mix focuses on developing the right product
or service that meets customer needs and preferences.
Key Aspects:
Product Features and Benefits.
Product Differentiation.
Product Packaging and Branding.
Example: "Amul Butter"

"Amul Butter" is an iconic product known for its high-quality and taste. Its consistent
and reliable quality has positioned it as the preferred choice among consumers,
making it a leading brand in the dairy market.
 Price
Striking the Right Balance
Definition:
The price element of the marketing mix involves setting the right price for the product or
service that reflects its value and meets customer expectations.
Key Aspects:
• Pricing Strategies (e.g., Cost-based, Value-based).
• Discounts and Promotions.
• Price Adjustments (e.g., Seasonal, Quantity).

Example: "OnePlus" Smartphones

"OnePlus" adopted a premium pricing strategy, positioning itself as a high-end
smartphone brand. Despite higher prices compared to some competitors, the brand's
reputation for quality and innovation justified the premium pricing, attracting tech
enthusiasts and brand loyalists.
 Place (Distribution)
Reaching the Right Audience

Definition:
The place element of the marketing mix refers to the distribution channels and methods
used to deliver the product or service to the target market.
Key Aspects:
• Distribution Channels (e.g., Retail, Online, Direct Sales).
• Geographic Coverage.
• Inventory Management.
Example: "BigBasket"
"BigBasket" is a successful online grocery delivery platform that offers a wide range of
products and delivers them to customers' doorsteps. With a user-friendly website and
efficient logistics, they have expanded their presence across various cities, making grocery
shopping convenient and accessible.
 Promotion
Creating Awareness and Interest

Definition:
The promotion element of the marketing mix involves various marketing communication
strategies to promote and create awareness about the product or service.
Key Aspects:
• Advertising (TV, Print, Digital).
• Sales Promotion.
• Public Relations.
• Social Media Marketing.
Example: "Cadbury Dairy Milk"
"Cadbury Dairy Milk" has consistently used emotional and heartwarming advertisements
to connect with consumers. Their festive campaigns have become a part of Indian culture,
fostering a strong emotional bond with customers and driving sales during celebrations.
 People: The people who are directly or indirectly
involved in delivering the service to customers.

This includes employees, frontline staff,

customer service representatives, and anyone
7 Ps of Services : who contributes to the customer experience.

Extended Process: The step-by-step procedures and systems

involved in delivering the service.
Marketing Mix)
It encompasses the customer journey, service
delivery timeline, and how the service is
executed.

Physical The tangible elements that support the service

Evidence: delivery and enhance the customer experience.

It includes the physical environment, facilities,

equipment, and any tangible evidence that
assures customers of the service quality.
MARKET SEGEMENTATION
 MARKET SEGMENTATION

Definition-“The process of breaking down the total market for a product

or service into distinct sub-groups or segments, where each segment
may conceivably represent a distinct target market to be reached with a
distinctive marketing mix.”
 BASIS OF SEGMENTATION

Demographic Segmentation
This market segmentation strategy assumes that individuals with similar demographics will have similar
needs.
Ex: A company may target its skincare products specifically to women aged 25-40 with a certain income
level.
Geographic Segmentation
This approach groups customers by physical location, assuming that people within a given geographical
area may have similar needs. This strategy is more useful for larger companies seeking to expand into
different branches, offices, or locations.
Ex. A beverage company might market different products or variations based on regional preferences,
for example, offering different flavors in hot and cold climates.
Psychographic Segmentation
Most difficult market segmentation approach, psychographic segmentation strives to classify
consumers based on their lifestyle, personality, opinions, and interests. This may be more
difficult to achieve, as these traits (1) may change easily and (2) may not have readily available
objective data. However, this approach may yield strongest market segment results as it groups
individuals based on intrinsic motivators as opposed to external data points.
Ex: A high-end fashion brand might target consumers who have a luxury lifestyle and a
preference for exclusive, trendy products.
Behavioral segmentation
Behavioral segmentation relies heavily on market data, consumer actions, and decision-making
patterns of customers. This approach groups consumers based on how they have previously
interacted with markets and products. This approach assumes that consumers prior spending
habits are an indicator of what they may buy in the future.
PRE-REQUISITES OF EFFECTIVE SEGMENTATION
Ideally, the base(s) used for segmentation should lead to segments that are:
Measurable: The base(s) should ideally lead to ease of measurement (how many
potential customers are in each segment?), the size, purchasing power, and profiles of the
segments can be measured.
Accessible: The base(s) used should ideally lead to the marketer being able to reach (in
terms of both communication and physical product) selected market targets through
marketing efforts.
Substantial: The base(s) used should ideally lead to segments that are sufficiently large
(a positive return on investment is expected) to be worthwhile serving as distinct market
targets.
Meaningful (Differentiable): The base (s) used should lead to segments that have
different preferences/needs and show clear variations in market behaviour/response to
specialized marketing efforts.
 TARGETING

Targeting is the process of evaluating market segments and deciding

which among them shows the most promise for development. This
evaluation process broadly involves assessing the attractiveness of the
various segments in the market to determine which are worth serving.
 Criteria to Choose a Target Market:

Extent of segment competitive rivalry: A more

competitive segment will tend to be less attractive,
particularly to the new entrant.
Unsatisfied needs: The segment has some relatively
unsatisfied needs that the company can serve
particularly well.
Sufficient sales and profit potential: Companies
wants to select segments that have the right size and
growth characteristics.
Strategic Fit of the Segment: Strategic fit means
there is a good match of a target market to the firm’s
goals, and resource capabilities.
SELECTING TARGET
MARKET

Undifferentiated Targeting: Using

an undifferentiated Targeting (or
mass marketing) strategy, a firm
might decide to ignore market
segment differences and target the
whole market with one offer.
Example: The market for petrol is
largely undifferentiated.
Differentiated Targeting:

A differentiated target approach,

often referred to as simply
differentiation means developing
different value offerings for different
targeted segments.
Concentrated Targeting: A
concentrated target marketing
approach, which Michael Porter
refers to as a focus strategy and is
also popularly called a niche
strategy, involves targeting a large
portion of a small market.
Example: Rolex Watch/Gucci
Mass Customization (Individual/one-
to-one):
Mass customization is the process by
which firms interact one to one with
masses of customers to design products,
services, and marketing programs tailor-
made to individual needs.
Example: Nike ID or Puma Factory (to
design and order your very own
personalized sneakers.)
POSITIONING
POSITIONING
Product positioning relates to the task of ensuring that a particular company’s
products or services occupy a predetermined place in selected target markets,
relative to competition in that market.
A product position is the way a product is defined by consumers on important
attributes—the
place the product occupies in consumers’ minds relative to competing products.
POSITIONING STEPS-
HOW TO DETERMINE
• Important attributes in choosing
between competitive offerings
• Customer perceptions of the
position of competitive market
offerings with respect to these
attributes
• The most advantageous position
for the company within this
segment of the market.
Perceptual Map:
Visual tool for positioning called
a perceptual map, which
displays paired attributes in
order to compare consumer
perceptions of each
competitor’s delivery against
those attributes.
Perceptual Map for Toothpaste:
 Positioning process
1.Identifying the Target Market: Determine the specific segment of the market you want
to target.
2.Understanding Customer Needs: Research and analyze the needs, preferences, and
perceptions of the target audience.
3.Analyzing Competitors: Evaluate the strengths and weaknesses of competitors to
identify opportunities for differentiation.
4.Defining Unique Selling Proposition (USP): Identify the unique qualities or benefits
that set your product or brand apart from others in the market.
5.Creating a Positioning Statement: Develop a concise statement that communicates
the unique value of your product or brand to the target audience.
6.Implementing Marketing Mix Strategies: Align your product, price, place, and
promotion strategies to reinforce the desired position in the market.
7.Monitoring and Adjusting: Continuously monitor market trends, consumer
perceptions, and competitive activities. Adjust your positioning strategy as needed to stay
relevant and effective.
CONSUMER BUYING DECISION
ORGANIZATIONAL BUYING
(DECISION MAKING)

It is a process in which multiple employees

select goods or services on behalf of a
larger group (collective decision-making
situation)
 Phase 1 Recognition of a Problem

Phase 2 Description of the Need

ORGANIZATIONAL
BUYING PROCESS Phase 3 Product Specification

Phase 4 Supplier Search

Phase 5 Proposal Solicitation

Phase 6 Supplier Selection

Phase 7 Order Routine Specification

Phase 8 Performance Review

 Marketing The marketing environment refers to
Environment the external factors and forces that
influence a company's marketing
decisions, strategies, and overall
Understanding the External business performance.
Forces Shaping Marketing
Strategies
Elements of Marketing Environment:
• Microenvironment
• Macroenvironment
 Microenvironment Elements:
• Customers
• Suppliers
Microenvironment • Competitors
The Immediate • Intermediaries
Surroundings • Publics

Impact on Marketing:
• Understanding customer needs and
preferences.
• Building strong relationships with
suppliers and intermediaries.
• Monitoring and analyzing competitor
strategies.
 Macroenvironment Elements:
• Economic Factors
Macroenvironment • Socio-Cultural Factors
• Technological Factors
The Broader • Political and Legal Factors
Picture • Environmental Factors

Impact on Marketing:
• Adapting to economic fluctuations and
consumer spending patterns.
• Incorporating cultural trends and societal
values into marketing messages.
• Embracing technological advancements
and digital transformation.