What Is Marketing? Fundamentals Of Marketing Management .

What is Marketing?Fundamentals of MarketingManagementProcess by which individuals and groupsobtain what they need and want throughcreating and exchanging products andvalue with others.Dr. P.V. (Sundar) BalakrishnanSimply put:Marketing is the delivery of customersatisfaction at a profit.Managing World-Class OrganizationsS #1BalakrishnanThe Marketing ObjectiveActivities in the Marketing Process .“Satisfy the needs of a group of customers betterthan the competition.” Distinguish from Selling or Advertising:– merely a subset of marketing actions used tosatisfy consumer needs. Marketing focuses on the use of all the firm’scontrollable influences to satisfy the customer.S #3BalakrishnanS #2BalakrishnanBroad Objective of MarketingIdentify needs of customers that company cansatisfy Design a Product (“bundle of benefits”) thatsatisfies those needs - better than existingproducts. Promote / communicate these benefits in orderto motivate purchase Price at the right level so that consumers arewilling & able to buy the product and the firm’sprofit goals are met Make the product available at the right Place sothat exchange is facilitated S #4BalakrishnanCore Marketing Concepts To grow the business by adapting it to changes in theenvironment : by monitoringNeeds, wants,and demands changes in customer needs changes in competition changes in the company’s own skills /resourcesMarkets looking for opportunities & threats that arise fromthese changes initiate tactical actions that “fit” the co’s offeringto these opportunities / threats.BalakrishnanS #5Exchange,transactions,and relationshipsBalakrishnanProductsand servicesValue,satisfaction,and qualityS #6

Consumer’s Needs, Wants and DemandszNeeds - state of felt deprivation for basic itemssuch as food and clothing and complex needssuch as for belonging.–zProductsAnything that can be Offered to a Market to Satisfy a Need or Wanti.e. I am hungry.Wants - form that a human need takes asshaped by culture and individual personality.–zProducts & Services:OrganizationsInformationi.e. I have money to buy this meal.ProductsIdeasActivities or Benefits Offered for Sale That Are EssentiallyIntangible and Don’t Result in the Ownership of AnythingBalakrishnanS #8How Do Consumers Choose Among Products andServices? DMPzA bundle of Attributes that provide Consumerswith certain Benefits.Also calledzEx: Drill Bits.Value Gained From Owning a Product andCosts of Obtaining the Product isCustomer Value– Resource; Marketing Offer; Customer Solution– Benefits provided?zPlacesServicesS #7BalakrishnanzPersonsi.e. I want a burger, fries, and a soft drink.Demands - human wants backed by buyingpower.–ExperiencesSellers who focus on the Specific product ratherthan the Benefits provided suffer from “MarketingMyopia”.Product’s Perceived Performance in Delivering ValueRelative to Buyer’s Expectations isCustomer SatisfactionTotal Quality Management Involves Improving theQuality of Products, Services, andMarketing ProcessesS #9What is a Market?How Do Consumers Obtain Products andServices?Exchanges:Fundamental ConceptTransactions:Unit of MeasurementHow does Saturn build lasting relationships with customers?People WhoExhibit NeedResources toExchangeRelationshipsRelationship Marketing:S #10BalakrishnanBuilding a MarketingNetwork Consisting ofThe Company and AllIts SupportingStakeholdersWillingness toExchangeMarket –EthicalBuyers whoshare aparticular needor want thatcan be satisfiedAttitudesthroughofexchangeOthers ishnanActualBuyersPotentialBuyersClick or Press Space Bar to ReturnBalakrishnanS #11BalakrishnanS #12

Modern Marketing SystemMarketing mediariesEnvironmentEnvironmentCompetitorsEnd UserMarketS #13BalakrishnanMarketing Management PhilosophiesProduction ConceptSelling Concept Consumers will buy products only ifthe company promotes/ sells theseproducts.BalakrishnanImplementingprogramsto createexchangeswith targetbuyersto achieveorganizationalgoalsFinding andincreasingdemand, alsochanging orreducingdemand suchas ting newcustomers andretaining andbuildingrelationshipswith currentcustomersS #14BalakrishnanSocietal Marketing ConceptSociety(Human Welfare)available and highly affordable. Improve production and distribution. Consumers favor products that offerthe most quality, performance, andinnovative features.Societal Marketing ConceptDemandManagement Consumers favor products that areProduct ConceptMarketing ConceptMarketingManagementSocietalMarketingConcept Focuses on needs/ wants of targetmarkets & delivering satisfactionbetter than competitors.Consumers Focuses on needs/ wants of targetmarkets & delivering superior value.S #15Basic Marketing ConceptCompany(Want Satisfaction)(Profits)S #16BalakrishnanMarketing vs. Sales Concepts Achieving the SATISFACTION of the Customers’ he Selling Concept Achieving the OBJECTIVES of the ProfitsthroughSatisfactionThe Marketing ConceptBalakrishnanS #17BalakrishnanS #18

Evolution of MarketingThe Marketing ConceptTo achieve organizational (& Societal) goalsby determining the needs and wants ofcustomers and delivering the desired benefitsmore effectively and efficiently thancompetitors.Marketing as Organizational ketingPhilosophyz“There is only one valid definition of businesspurpose: to create a customer.”z“Everything starts with the customer.”- Peter Drucker- Lou Gerstner, CEO of IBM“Creating shareholder wealth is not thepurpose of the business. It is the reward forcreating customer value.”- Michael Tracy and Fred Wiersema in CFO magazineMarketingConceptThis is going on today atInternet Time!S #19BalakrishnanS #20BalakrishnanConnecting With CustomersMarket OrientationzAn organization that has a marketorientation focuses its efforts oncontinuously collecting information aboutcustomers’ needs and competitorscapabilities, sharing this information acrossdepartments, and using the information tocreate customer value.zS #21BalakrishnanDeveloping the Marketing MixMarket Segmentation: determining distinct groupsof buyers (segments) with different needs,characteristics, or behavior.Market Targeting: evaluating each segment’sattractiveness and selecting one or more segmentsto enter.S #22BalakrishnanMarketing FrameworkPriceProductAmount of moneythat consumershave to pay toObtain the product“Goods-and-service”combination that acompany offers atarget marketTargetCustomersActivities thatInform, persuade targetcustomers to buythe pany activitiesthat make theproduct availablePlaceS #23BalakrishnanSource: Robert Dolan, HBS NoteS #24

Recasting the 6C - 4P Framework in ValueTermsThe new view – 6 Cs ComplementorCompetitorCustomer value your product more if thecomplementor’s product is present (e.g.,hot dog producer and mustard producer!) Customer Company Competitor Collaborators Complementors Context Product Price Place PromotionCustomer value your product less if thecompetitor’s product is presentS ningValueBalakrishnanS #26Consumer BenefitsCreate value for consumers and benefit producers throughthe four utilities: Form utility–having a product or service in the form youwant it by to make it more appealing to buyers. Time utility–having a product or serviced when you want it. Place utility–having a product or service where you want it. Possession utility–helping buyers to take possession of aproduct or service.S #27BalakrishnanRelationship MarketingThe hallmark of developing and maintainingeffective customer relationships is todaycalled relationship marketing, linking theorganization to its individual customers,employees, suppliers, and other partnersfor their long term benefit.BalakrishnanS #28Connections With CustomersCustomer Relationship Management (CRM)zzMost marketers are targetingfewer, potentially moreprofitable customers.Asking:– What value does the customerbring to the organization?– Are they worth pursuing?zFocus has shifted to:– keeping current customers,and– building lasting relationshipsbased on superior satisfactionand value.BalakrishnanS #29Customer relationship management is theprocess of identifying prospective buyers,understanding them intimately, anddeveloping long-term perceptions of theorganization and its offering so that buyerswill choose them in the marketplace.BalakrishnanS #30

Technologies for ConnectingThe Marketing ProcesszCreate Products &Services Tailored toMeet Customer NeedsLearn About &Track CustomersWith DatabasesThe Value Delivery SequenceTwo Views of the Value-Delivery ProcessConnecting Technologies inComputers,Telecommunications,Information, & TransportationHelp To:Communicate WithCustomers in GroupsOr One-on-OneBalakrishnanWhat aspects ofthe Internetmake it a goodforum formarketing?How do Webcompaniescompete withbrick and mortarcompanies?Distribute ProductsMore Efficiently &EffectivelyClick or press spacebar to returnS #31The New Marketing ParadigmzzzzzzzzzzzzzOld viewMarketing as a FunctionzSeparate FunctionzProduct ManagementzFeature Positioning for masszmarketDomestic FocuszConsumerszShort-term sales, share objectivezTransactionszLimited use of ITz“Self-sufficiency” biaszPrice discountszProduct qualityzMedia and sales “power”;zefficiencyBalakrishnanNew viewMarketing as a Business PhilosophyIntegrated with other functionsMarket and Account managementBenefit positioning for segmentedmarketsGlobal focusValue creation for all StakeholdersLong-term profit and satisfactionLong-term relationship partnershipsExpanded use of IT strategiesCo-marketing and strategic alliancesValue-based pricingQuality providerMessage effectivenessS #33BalakrishnanS #32

Fundamentals of Marketing Management Managing World-Class Organizations Dr. P.V. (Sundar) Balakrishnan Balakrishnan S #2 What is Marketing? Process by which individuals and groups obtain what they need and want through creating and exchangingproducts and value with others. Simply put: Marketing is the delivery of customer satisfaction at a profit.