MARKETING MANAGEMENT

As per philip kotler,marketing is a societal

process by which individuals and groups
obtain what they need and want through
creating,offering,and freely exchanging
products and services of value with others.
As per AMA,marketing is the process of
planning and executing the conception,pricing,
promotion and distribution of ideas,goods and
services to create exchanges that satisfy
individual and organisational goals.
CORE CONCEPTS OF
MARKETING
SEGMENTING, TARGETING & POSITIONING
MARKETPLACE, MARKETSPACE,AND
METAMARKET
MARKETERS AND PROSPECTS
NEEDS ,WANTS, AND DESIRES/DEMAND
PRODUCT, OFFERING, AND BRAND
VALUE AND SATISFACTION
EXCHANGE AND TRANSACTIONS
RELATIONSHIPS AND NETWORKS
CORE CONCEPTS(contd.)
MARKETING CHANNELS
SUPPLY CHAIN
COMPETITION
MARKETING ENVIRONMENT(task env.
&broad env.)
MARKETING PROGRAM
Fundamental Principles of
Marketing

Customer Value

Differentiation Focus
 Major Actors and Forces in the
Company’s Marketing Environment
A company’s marketing environment consists of the external actors and
forces that
affect the company’s ability to develop and maintain successful
transactions and
relationships with its target customers.
ECONOMIC

PHYSICA Competitors POLITICAL

L /LEGAL

Suppliers Company Marketing Customers

intermediaries SOCIO/
CULTURAL
TECHNO- Publics
LOGICAL
DEMOGRAPHI
C
 Marketing Strategy Planning
Process
Narrowing down to focused strategy with screening criteria
Customers
Segmentation Produc Plac
S. & Targeting t e
W. Target
Company
O. Marke
T. Differentiatio t
n Pric Prom
& Positioning e o
Competitors

External Market Environment

3-3
 WHAT IS MARKET SEGMENTATION ?

Market segmentation can be defined as the process of dividing a

potential
market into distinct subsets of consumers with common needs or
characteristics
and selecting one or more segments to target with a distinct marketing
mix.
Before the widespread adoption of the marketing concept, the prevailing
way
of doing business with consumers was through mass marketing --- that
is,
offering the same product and marketing mix to all consumers. The
essence of
this strategy was summed up by the entrepreneur Henry Ford, who
offered the
Model T automobile to the public ---
“ in any color they wanted, as long as it was black.”
suruchi@vsnl.com
 MARKET SEGMENTATION BASES AND
SELECTED VARIABLES
SEGMENTATION BASE SELECTED SEGMENTATION
VARIABLES
Geographic Segmentation North, South, East, West.
Region Major metropolitan areas, small cities,towns
City Size Urban, suburban, exurban, rural
Density of Area
Temperate, hot, humid
Climate
Demographic Segmentation
Age Under 11, 12-17, 18-34, 35-49, 50-64, 65-74, 75+
Sex Male, female
Martial Status Single, married, divorced, lining together,
widowed
Income Under $15000,$15000-$24000, $25000-$39999,
$40,000-$64,999, $65,000 and over.
Education
Some high school, high school graduate, some
Occupation college, college graduate, postgraduate
Professional, blue-collar, white-collar, agricultural

suruchi@vsnl.com
MARKET SEGMENTATION BASES AND
SELECTED VARIABLES
SEGMENTATION BASE SELECTED SEGMENTATION
PSYCHOLOGICAL VARIABLES
/PSYCHOGRAPHIC
SEGMENTATION Shelter, safety, security, affection, sense of
Needs-Motivation self
worth
Personality Extroverts, introverts, aggressives, compliants
Perception Low risk, moderate risk, high risk
Learning-Involvement Low involvement, high involvement
Attitudes Positive attitude, negative attitude
Psychographic(Lifestyle) Swingers, straights, conservatives, status
seekers
SOCIOCULTURAL SEGMENTATION
Culture
American, Italian, Chinese, Mexican
Subculture
Jewish, Catholic, Protestant, other
Religion
African-American, Caucasian, Oriental,
Race/Ethnicity
Hispanic
Social Class
Lower, middle, upper
Family Lifestyle
Bachelors, young marrieds, empty nesters
suruchi@vsnl.com
Positioning and Differentiation
Performance Conformance

Features Product Design

Differentiation
Form Tools Style

Reliability Durability
Repairability
DEMAND STATES
NEGATIVE DEMAND-market dislikes the
product.
NO DEMAND-market not interested in the
product.
LATENT DEMAND-need not satisfied with
existing products.
DECLINING DEMAND
IRREGULAR DEMAND
FULL DEMAND
OVERFULL DEMAND
CUSTOMER VALUE
Customers are value maximisers,and they tend to take rational
purchase decisions
Concept of customer Delivered value/customer perceived value-it is
the difference between prospective custmer’s evaluation of all the
costs of an offering and the alternatives.
Customer delivered value=total customer value-total customer cost.
Total customer value-is the percieved monetary value of the bundle of
the bundle of economic,functional & psychological benefits that
customer expect from a given market offering.
Total customer cost-is the bundle of costs,customers expect to incur in
evaluating,obtaining,using&disposing off,the given market offering.
Customer satisfaction-S=P-E
S=SATISFACTION LEVEL
P=PERFORMANCE AS PERCIEVED BY CUSTOMER
E=PERFORMANCE AS ALREADY EXPECTED BY THE
CUSTOMER.
CONSUMER BUYING
BEHAVIOR
Before developing their marketing plans, marketers
need to study consumer markets and consumer
behavior.
In analyzing consumer markets, firms need to research
who constitutes the market (occupants),
what the market buys (objective),
who participates in the buying (organization),
how the market buys (operations),
when the market buys (occasions),
and where the market buys (outlets).
CONSUMER BUYING
BEHAVIOR
Consumer behavior is influenced by 4 factors:
cultural(culture, subculture, social class)
social(reference groups, family and social roles,
status)
personal(age, stage in the life cycle, occupation,
economic circumstances, lifestyle, personality, self
concept)
psychological(motivation, learning beliefs,
perception, attitudes)
CONSUMER BUYING
BEHAVIOR
BUYING ROLES:
initiator--a person who first suggests the idea of
buying the product or service
influencer--a person whose views or advice
influences the decision
decider--a person who decides on any component
of a buying decision
buyer--the person who makes the actual purchase
user--a person who consumes the product/service.
CONSUMER BUYING
BEHAVIOR
The typical buying process consists of the following
sequence of events:
problem recognition
information search--personal, commercial, public or
experiential sources
evaluation of alternatives--attribute analysis
purchase decision
post purchase behavior.
CONCEPT OF VALUE CHAIN
Ways to create more customer value.It is the ability to
perform particular activities effectively and the ability to
perform certain activities more effectively and to
manage the linkages between these activities which are
the source of competitive advantage.
Primary activities-are those which are directly
concerned with creation/delivery of product/service e.g.
receiving goods,machining,transportation,
marketing/sales etc.
Support activities-are those which help to improve
efficiency/effectiveness of primary activities e.g.
procurement of resource inputs,technology
developments,infrastructure,HRM etc.
High Performance Businesses
Figure 3-3: The Generic Value Chain
VARIOUS TYPES OF BUYING
SITUATIONS
Complex buying situation-purchasing a car, computer, house etc.
stress is on pre-purchase councelling.Involvement on marketer’s
part is very high because brands differ widely.
Habitual buying situation-purchasing grocery items,low involvement
because brands differ marginally marketers job is to make it
available easily.
Dissonace-reducing buying situation-purchasing carpets,hi-tech
electric devices,personal computers etc.High involment is required
at post purchase level so as to reduce post purchase dissonance of
customers.
Variety-seeking buying situation-purchasing cookies,perfumes,
cosmetics products,clothes,shoes etc.Low involvement.stress is on
attracting retailers& customers through attractive offers,prompting
them to ‘switch’ brands.
Customer Value
Figure 3-1:
Determinants of Customer Delivered Value
Relationship Marketing
Figure 3-5: Levels of Relationship Marketing
Customer Retention
Reducing customer churn (defection) is highly
desirable
Define and measure retention rate
Identify causes of attrition
Estimate profit lost from customer defection
(customer lifetime value)
Estimate cost to reduce defection; take appropriate
action
How and Why Consumers Buy
Exert broadest and
Influence Factors
deepest influence
Cultural Culture
Social Subculture
Personal Social classes
Psychological
Consumer Buying Decision Process

Marketers Must Identify and Understand:

Who Makes the Buying Decision

Types of Buying Decisions

Stages in the Buying Process

Consumer Buying Decision Process

Understand Initiator
Influencer
Buying roles Decider
Buying behavior Buyer
Buying decision User
process
Consumer Buying Decision Process

Understand Complex buying

behavior
Buying roles Dissonance-reducing
buying behavior
Buying behavior Habitual buying behavior
Buying decision Variety-seeking buying
process behavior
Consumer Buying Decision Process

Understand Five stages in the

consumer buying
Buying roles process
Buying behavior The amount of time
Buying decision spent in each stage
process varies according to
several factors
Consumer Buying Decision Process

Figure 6-2:
Five-Stage Model of the Consumer Buying Process
Consumer Buying Decision Process

Post-purchase Behavior:
Consumers’ expectations are compared to
performance
Post-purchase satisfaction influences future
behavior
Purchasing behavior
Word-of-mouth communications
Organizational Buying
Routine reorders from
Buying Situations approved vendor list
Low involvement,
Straight rebuy minimal time
Modified rebuy commitment
New task Example: copier paper
Organizational Buying
Buying Situations Specifications, prices,
delivery terms or other
aspects require
Straight rebuy
modification
Modified rebuy Moderate level of
New task involvement and time
commitment
Example: desktop
computers
New Product Development
What is a “New” Product?
New-to-the-world products
New product lines
Additions to existing product lines
Improvements and revisions of existing products
Repositioned products
Cost reduction products
Marketing Through the
Product Life Cycle

Figure 10-4:
Sales and
Profit Life
Cycles
Stages of the Product Life Cycle
Low sales
PLC Stages
High costs per
Introduction customer
Growth Negative profits
Maturity Innovator customers
Decline Few competitors
Stages of the Product Life Cycle
Rising sales
PLC Stages
Average costs
Introduction Rising profits
Growth Early adopters
Maturity customers
Decline Growing competition
Stages of the Product Life Cycle
Peak sales
PLC Stages
Low costs
Introduction High profits
Growth Middle majority
Maturity customers
Decline Stable/declining
competition
Stages of the Product Life Cycle
Declining sales
PLC Stages
Low costs
Introduction Declining profits
Growth Laggard customers
Maturity Declining competition
Decline
Positioning and Differentiation
Two views of positioning:
Ries and Trout: products are positioned in
the mind of prospect
Treacy and Wiersema: positioning via
value disciplines
Product leader firm
Operationally excellent firm
Customer intimate firm
Positioning and Differentiation
Differentiated products feature meaningful
and valuable differences that distinguish the
company’s offering from the competition.
Differences are stronger when they are
important, distinctive, superior, preemptive,
affordable, and profitable.
The Product and Product Mix
Product Classified by
Classifications shopping habits:
Convenience goods
Durability and Shopping goods
tangibility Specialty goods
Consumer goods Unsought goods
Industrial goods
The Product and Product Mix

Product Mix Decisions

Product Mix Width

Product Mix Depth

Product Mix Length

Product Mix Consistency

Product-Line Decisions

Product-line
analysis

Product-line length

Product-Line Modernization,
Featuring, and Pruning
Brand Decisions
The AMA definition of a brand:
“A name, term, sign, symbol, or design, or a
combination of these, intended to identify the
goods or services of one seller or group of
sellers and to differentiate them from the
competition.”
Brand Decisions

Levels of Meaning Conveyed by Brands

Attributes Benefits

Value User

Personality Culture
Brand Decisions
Brand equity refers to the positive differential
effect that a brand name has on customers.
Brand equity:
is related to many factors.
allows for reduced marketing costs.
is a major contributor to customer equity.
Corporate and Division
Strategic Planning

Strategic business units (SBUs) share

three characteristics:
Single business or collection of businesses
which can be managed separately
Has own set of competitors
Has manager responsible for strategic
planning and profits
Corporate and Division
Strategic Planning

Figure 4-2:
The Boston
Consulting Group’s
Growth-Share Matrix
Corporate and Division
Strategic Planning

Figure 4-3 (part 1 of 2):

Market-Attractiveness
Portfolio Strategies
Corporate and Division
Strategic Planning

Figure 4-3 (part 2 of 2):

Market-Attractiveness
Portfolio Strategies
Packaging and Labeling

Shipping
Package
Primary Packaging
Package Aspects

Secondary Package
Packaging and Labeling

Functions of Labeling

Identifies the Product or Brand

May Identify Product Grade

May Describe the Product

May Promote the Product

Setting the Price
Pricing Procedure Survival
Maximize current profits
Select pricing objective Maximize market share
Determine demand Penetration strategy
Estimate costs Market skimming
Analyze competition Skimming strategy
Select pricing method Product quality leaders
Select final price Partial cost recovery
Setting the Price
Pricing Procedure Understand factors that
affect price sensitivity
Select pricing objective
Estimate demand
Determine demand
curves
Estimate costs
Analyze competition
Understand price
Select pricing method
elasticity of demand
Elasticity
Select final price
Inelasticty
Setting the Price
Pricing Procedure Types of costs and levels of
production must be
Select pricing objective considered
Determine demand Accumulated production
leads to cost reduction via
Estimate costs
the experience curve
Analyze competition
Differentiated marketing
Select pricing method offers create different cost
Select final price levels
Setting the Price
Pricing Procedure Firms must analyze the
competition with respect to:
Select pricing objective Costs
Determine demand Prices
Possible price reactions
Estimate costs
Pricing decisions are also
Analyze competition
influenced by quality of
Select pricing method offering relative to
Select final price competition
Setting the Price
Pricing Procedure Price-setting begins with the
three “C’s”
Select pricing objective Select method:
Determine demand Markup pricing
Estimate costs Target-return pricing
Perceived-value pricing
Analyze competition
Value pricing
Select pricing method
Going-rate pricing
Select final price Auction-type pricing
Group pricing
Setting the Price
Pricing Procedure Requires consideration of
additional factors:
Select pricing objective Psychological pricing
Determine demand Gain-and-risk-sharing
pricing
Estimate costs
Influence of other marketing
Analyze competition mix variables
Select pricing method Company pricing policies
Select final price Impact of price on other
parties
Channel-Design Decisions

Push vs. Pull

Strategy

Analyzing Consumers’ Desired

Service Output Levels
Establishing Objectives
and Constraints
Identifying / Evaluating Major
Channel Alternatives
Work Performed by Channels
Figure 14-3:
Consumer and Industrial Marketing Channels
Channel-Design Decisions
Exclusive distribution
Channel Factors Severely limited distribution
Selective distribution
Intermediary type Some intermediaries willing
to carry good are selected
Number of
Intensive distribution
intermediaries
Offering is placed in as
Terms and many outlets as possible.
responsibilities of
intermediaries
Marketing Communications

Direct
Advertising
Marketing

Sales Public
Promotion Relations
Personal
Selling
Developing Effective Marketing
Communications

Steps in Marketing Communications

Program Development

Identify target audience Establish the budget

Determine objectives of Select the marketing
communication communications mix
Design the message Measure results
Select communication Manage the IMC process
channels
Developing Effective Marketing
Communications

Step 1: Identifying the target audience

Includes assessing the audience’s perceptions of
the company, product, and competitors’
company/product image
Step 2: Cognitive, affective, and behavioral
objectives may be set
Step 3: AIDA model guides message design
Developing Effective Marketing
Communications
Message content
Message Design decisions involve the
selection of appeal,
Content theme, idea, or USP
Structure Types of appeals
Rational appeals
Format Emotional appeals
Source Moral appeals
Developing Effective Marketing
Communications
One-sided vs. two-
Message Design
sided messages
Content Order of argument
presentation
Structure
Format
Source
Developing Effective Marketing
Communications

Message Design Message format

decisions vary with the
type of media, but may
Content include:
Structure Graphics, visuals
Format Headline, copy or script
Sound effects,
Source voice qualities
Shape, scent,
texture of package
Developing Effective Marketing
Communications
Message source
Message Design characteristics can
influence attention and
Content recall
Structure Factors underlying
perceptions of source
Format credibility:
Source Expertise
Trustworthiness
Likability
Developing Effective Marketing
Communications
Advertising
Communications Mix Sales promotion
Selection Public relations and
publicity
Types of promotional Direct marketing
tools Personal selling
Selection factors
Developing Effective Marketing
Communications
Consumer vs. business
Communications Mix market
Selection Stage of buyer readiness
Stage of product life
Types of promotional cycle
tools Market rank
Selection factors
Developing and Managing the
Advertising Campaign

Newspapers Newsletters

Internet Magazines
Major
Radi Media Outdoo
o Types r
Direct Mail Brochures
Televisio Telephon
n e
Yellow
Pages
Sales Promotion
Sales promotions are short-term incentives
designed to stimulate purchase among
consumers or trade
Purpose of sales promotion
Attract new triers or brand switchers
Reward loyal customers
Increase repurchase rates
Sales Promotion
Cross-Promotions Tie-in
Promotions
Premiums Major Cash Refunds
Consumer
Prizes Sales Coupon
Promotion s
Samples Free Trials
Tools
Product Warranties Patronage Awards

POP Displays & Demonstrations

Public Relations
Major Public Relations Tools
News
Events
Speeches
Publications
Sponsorships
Identity Media
Public-service Activities
Direct Marketing
Direct marketing uses consumer-direct
channels to reach and deliver offerings to
consumers without intermediaries.
Direct marketing is growing and offers
consumers key benefits.
Firms are recognizing the importance of
integrated direct marketing efforts.
Direct Marketing Channels

Major Direct Marketing Tools

Face-to-Face Direct Mail

Online Catalog
Telemarketin
Kiosk
g
TV Marketing
Designing the Sales Force
Types of Sales Representatives

Deliverer
Order taker
Missionary
Technician
Demand creator
Solution vender
Personal Selling Principles
Major Aspects Sales-oriented approach
Stresses high pressure
techniques
Sales Customer-oriented
professionalism approach
Negotiation Stresses customer
problem solving
Relationship
Steps in industrial selling
marketing process
Personal Selling Principles
Major Aspects Reps need skills for
effective negotiation
Sales Negotiation is useful
when certain factors
professionalism characterize the sale
Negotiation Negotiation strategy
Relationship Principled
marketing BATNA
Personal Selling Principles
Major Aspects Building long-term
supplier-customer
relationships has grown
Sales in importance
professionalism Companies are shifting
Negotiation focus away from
Relationship transaction marketing to
relationship marketing
marketing
Business Strategic Planning

Differentiation

Porter’s Generic
Focu Strategies
s

Overall cost
leadership
MARKET POSITION STRATEGIES
MARKET LEADER – Defence strategies
MARKET CHALLENGER – Challenger
strategies
MARKET FOLLOWER
MARKET NICHER
 GROWTH STRATEGIES(Ansoff’s
growth vector matrix)

MARKET MARKET
CURRENT
PENETRATION DEVELOPMENT
PRODUC
T

PRODUCT DIVERSIFICATION
NE DEVELOPMENT
W

CURREN NE
T MARKET W
PORTER’S 5 FORCES MODEL
DETERMINING PROFITABILITY &
SHAPING OF COMPETITION IN
AN INDUSTRY
COMPETITIVE FORCE
THREAT OF NEW ENTRANTS
THREAT OF SUBSTITUTES
BARGAINING POWER OF BUYERS
BARGAINING POWER OF SUPPLIERS