Unit-I

Marketing Management: Introduction

Defining Marketing
Marketing is the delivery of customer satisfaction at a profit-it is the simplest definition. The two
fold goal of marketing are-
 To attract the new customers by promising superior value and
 To keep current customers by delivering satisfaction.

Marketing is an organizational function and a set of processes for creating, communicating, and
delivering value to customers and for managing customer relationships in ways that benefit the
organization and its stakeholders.

Marketing Management
Marketing management is defined as the art and science of choosing target markets and getting,
keeping, and growing customers through creating, delivering, and communicating superior
customer value.

A broadened view of Marketing Tasks

Marketers are responsible for demand management, not creation of demand. A marketer has to
take into consideration different types of demand for his product before he comes up with a
strategy.

Eight different states of demand

1) Negative demand: If consumer dislikes the product and may even pay a price to avoid it. For
example, vaccinations, Dentist, many people avoid seeing the dentist.
Associated marketing task: The marketing task is to analyze the reasons for this dislike and
to find out whether a marketing program consisting of product redesign, lower prices, and more
positive promotion could change the customers belief and attitude.
Marketing approach is Conversational marketing.
Negative demand can be a positive one by doing:
 Try to create awareness rather than promotion.
 Inform the customers about the importance of your products.
2) Non-existent demand/No demand: Customers are unaware or uninterested in these types of
product.
Example: For example demand of boat in a city, where there is no lake or river or farmers may
be not interested in new farming method, or family planning is a non-existent demand for rural
people.
Associated Marketing Task: The marketing task is to find ways to connect the benefits of the
products to the person’s natural needs and interests. The task of marketing then becomes one
of stimulating demand for that product.
Technique: The marketing technique may be called stimulating marketing.

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3) Latent demand: Many consumers may share a strong need that cannot be satisfied by any
existing product.
Example: Harmless cigarette, more fuel efficient car.

Task: The marketing task is to measure the size of the potential market and develop effective
goods and services that would satisfy the demand.
Technique: Developmental marketing– develop a marketing mix that announces the product
and stimulates demand for trial.

4) Declining demand: When demand for a product is declining day by day. The marketer must
analyze the causes of market decline and determine whether demand can be re-stimulated by
finding new target markets, changing the products features or developing more effective
communication. The marketing task is to reverse the declining demand through creative
remarketing of the product.
For example Cosco soap, CD Players, Walkman or mechanical watches. etc.
Associated marketing approaches are-
 Re-marketing
 Re-branding
 Re-positioning
5) Irregular demand: Demand varies on a seasonal, yearly, monthly, daily and even hourly
basis.
Example: For example, an umbrella, tourist spot, petroleum jelly, ice cream, etc.
The marketing task, called synchro marketing, is to find ways to alter the time pattern of
demand through flexible pricing, promotion and other incentives.
6) Full demand: Adequate demand for a product all over the year. Organizations face full
demand when they are satisfied with their volume of business. This is an ideal situation. For
example, medicines, soap etc.
Marketing tasks:
i. Maintain the current level of demand in the face of changing consumer preference.
ii. Maintain and improve the products quality and continuously measure consumer satisfaction.
Technique: Maintenance marketing- develop a marketing mix that reinforces and reminds
customers why they follow or are loyal to the brand.
7) Overfull demand: Excess demand of a product. That means organizations face a demand level
that is higher than they can or want to handle. For example, electricity in the summer, at the
time of Eid, the price of train and bus ticket increase because of artificial stock created by the
sellers.
Task: Reduce demand
The marketing task called Demarketing, requires finding ways to reduce the demand
temporarily or permanently. General marketing and reducing promotion and service is one way
of handling this situation.
8) Unwholesome demand: Product that have undesirable social consequence i.e., not acceptable
by the society.

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 Example: Cigarettes, hard drinks, alcohol.
The marketing task is to help people give up the habit by using such tools as fear
communications, price hikes, and reduced availability.
Task: Destroy demand
Technique: Counter marketing, a marketing mix that emphasizes the downside of product
use and the benefits or product abandonment, public service announcements.

Key customer markets

1. Consumer Markets: consists of final consumers (who purchase for final consumption)
2. Business Markets: who purchase of reselling or further processing.
3. Global Market: Companies in the global marketplace must decide
- which countries to enter;
- how to enter each (as an exporter, licenser, joint venture partner, contract
manufacturer, or solo manufacturer);
- how to adapt product and service features to each country;
- how to price products in different countries; and
- How to design communications for different cultures.
4. Nonprofit and Governmental Markets: consists of non-profit organization and
government. For example, churches, universities, charitable organizations, and
government agencies.

Market, Market Place, Market Space and Meta Market

 Market-Traditionally, a “market” was a physical place where buyers and sellers gathered
to exchange goods. Market is defined as set of actual and potential customer.
 Market Place-Physical market.
 Market space-digital market. i.e., when one goes shopping on the Internet
 Meta Market-describes a cluster of complementary products and services that are closely
related in the minds of consumers but are spread across a diverse set of industries. The
automobile meta-market consists of automobile manufacturers, new and used car dealers,
financing companies, insurance companies, mechanics, spare parts dealers, service shops,
auto magazines, classified auto ads in newspapers, and auto sites on the Internet.

Core Marketing Concepts

Customer Needs, Wants, and Demands
 Needs: Needs are states of felt deprivation. They include basic physical needs for food,
clothing, warmth, and safety; social needs for belonging and affection; and individual
needs for knowledge and self-expression. These needs were not invented by marketers;
they are a basic part of the human makeup. When needs is not satisfied, people will try
either to reduce the need or look for an objects that will satisfactory. 5 types of needs-
Stated (an inexpensive car); Real (a car whose operating cost, not its initial price, is low);
Unstated (expects good service from the dealer); Delight (would like the dealer to include
an onboard navigation system); Secret (to be seen by friends as a savvy consumer).
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  Wants: Wants are the form human needs take as they are shaped by culture and individual
personality. An American needs food but wants a hamburger, French fries, and a soft drink.
A person in Mauritius needs food but wants a mango, rice, lentils, and beans. A person of
Bangladesh needs foods but wants rice, fishes and a glass of water. Wants are shaped by
one's society and are described in terms of objects that will satisfy needs. Wants are
describes in terms of objects that will satisfy needs.
 Demand: Human wants that are backed by buying power is defined as demand. People
have almost unlimited wants but limited resources. Thus, they want to choose products that
provide the most value and satisfaction for their money. When backed by buying power,
wants become demands.

Target Markets, Positioning and Segmentation

 Segmentation: Market segmentation involves dividing a market into distinct groups of
buyers who have different needs, characteristics, or behaviors and who might require
separate marketing strategies or mixes.
Markets consist of buyers, and buyers differ in one or more ways. They may differ in their
wants, resources, locations, buying attitudes, and buying practices. Through market
segmentation, companies divide large, heterogeneous markets into smaller segments that
can be reached more efficiently and effectively with products and services that match their
unique needs.
 Target Market: Consists of evaluating each market segment’s attractiveness and selecting
one or more market segments to enter. Market targeting is nothing but selecting the best
profitable segment
In India, Tata Motors launched Tata Nano especially for the lower income group.
 Market Positioning is arranging for a product to occupy a clear distinctive and desirable
place relative to competing products in the minds of target consumers.
For example,
 Pepsodent-long lasting protection from germs
 Close up-for fresh breath and whiter teeth
 Dutch Bangla Bank-Card based banking
 Brac Bank-SME Loan

 Differentiation: Actually differentiating the market offering to create superior

customer value.
It is the process of distinguishing a product or service from others to make it more appealing
to a specific target market. For example-features, warranty, performance etc.

Value propositions differentiate one brand from another.

Value proposition is set of intangible benefits offered to the customer.
Offerings makes value proposition physical.

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Offerings and Brands
Offerings means product.
Offering are products and services designed to deliver value to customers—either to fulfill their
needs, satisfy their “wants,” or both. The 10 basic offerings of goods, services, experiences, events,
persons, places, properties, organizations, information, and ideas. Offerings for target buyers,
delivering some central benefit(s).
A brand is an offering from a known source.
A brand name such as McDonald’s carries many associations in the minds of people: hamburgers,
fun, children, fast food, and golden arches. These associations make up the brand image. All
companies strive to build a strong, favorable brand image.

Value and Satisfaction

Value is a ratio between what the customer gets and what he gives.
Benefits
Value=----------------
Costs
Satisfaction: Judgment of a product’s perceived performance with expectation.
 If the product’s performance falls short of the customer’s expectations, the buyer is
dissatisfied.
 If performance matches expectations, the buyer is satisfied.
 If performance exceeds expectations, the buyer is delighted.

Marketing channel:
To reach a target market, the marketer uses three kinds of marketing channels.
 Communication channels deliver messages to and receive messages from target buyers.
They include newspapers, magazines, radio, television, mail, telephone, billboards,
posters, fliers, CDs, audiotapes, and the Internet.
 Distribution channels to display or deliver the physical product or service(s) to the buyer
or user.
 Service Channel-through which carry out transactions with potential buyers. For example,
Banks, Insurance etc.

Marketing Environment
The marketing environment is made up of the internal and external environment of the business.
While internal environment can be controlled, the business has very less or no control over the
external environment.

Internal Environment
The internal environment of the business includes all the forces and factors inside the organisation
which affect its marketing operations. These components can be grouped under the Five Ms of the
business, which are:
 Men
 Money
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  Machinery
 Materials
 Markets
The internal environment is under the control of the marketer and can be changed with the
changing external environment.

External Environment
The external environment constitutes factors and forces which are external to the business and on
which the marketer has little or no control. The external environment is of two types:

 Micro Environment: factors those are close to the company, suppliers, competitors,
management, distributors. Micro environment examples include customers, banks and
trade unions as they all interact with the firm.
 Macro Environment: In general macro environment factors are not close to the firm.
Macro environment examples include legislation, the economy (e.g. recession, inflation,
VAT changes), and technological change such as the internet. Macro environment factors
are uncontrollable factors but still influence company strategy.

Supply Chain
The supply chain describes a longer channel stretching from raw materials to components to final
products that are carried to final buyers.

Marketing Management Philosophies/Marketing Management Orientations

 The Production Concept. The production concept holds that consumers will favor products
that are available and highly affordable. Therefore, management should focus on improving
production and distribution efficiency. This concept is one of the oldest orientations that guides
sellers. For example, both personal computer maker Lenovo and home appliance maker Haier
dominate the highly competitive, price-sensitive Chinese market through low labor costs, high
production efficiency, and mass distribution.
 The Product Concept. The product concept holds that consumers will favor products that
offer the most in quality, performance, and innovative features. Under this concept, marketing
strategy focuses on making continuous product improvements. Basically this concept is about
to attract the customers by improving the quality and performance on one hand and offer
attractive prices on other. Similarly the design, packaging and effective distribution channels
of product are some of the important tactics to attract the customers. Example-mouse trap vs.
chemical spray. The important drawback of product concept is that it can lead to marketing
myopia in which the organization overlooked the importance of other substitutes available in
the industry.
 The Selling Concept: The selling concept holds that consumers will not buy enough of the
organization's products unless it undertakes a large-scale selling and promotion effort. This
concept is typically practiced with unsought goods (those that buyers do not normally think of
buying, such as encyclopedias or insurance.). Most firms practice the selling concept when

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 they have overcapacity. Their aim is to sell what they make rather than make what the market
wants. Such marketing carries high risks. It focuses on creating sales transactions rather than
on building long-term, profitable relationships with customers.
 The Marketing Concept. The marketing concept holds that achieving organizational goals
depends on knowing the needs and wants of target markets and delivering the desired
satisfactions better than competitors do. Under the marketing concept, customer focus and
value are the paths to sales and profits. Instead of a product-centered make-and sell philosophy,
the marketing concept is a customer-centered sense-and-respond philosophy.

Holistic Marketing Concept

Holistic Marketing Concept is probably the newest approach to marketing and the latest business
concept.
A holistic marketing concept is based on the development, design and implementation of marketing
programs, processes and activities that recognize the breadth and interdependencies. Holistic
marketing recognizes that ‘everything matters’ with marketing and that a broad, integrated
perspective is necessary to attain the best solution.”
Holistic marketing is based on the philosophy that everything matters in marketing.

There are four dimensions of holistic marketing.

1. Relationship marketing,
2. Internal marketing,
3. Integrated marketing, and
4. Performance marketing.

Relationship Marketing

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Relationship marketing includes of building mutual satisfaction with customers long term
relationships with key parties as well as go through profit of the business.
Key parties are
• Customers-People those who are the target market for a firm.
• Channel - Suppliers, distributors
• Partner- Dealers, agencies
Relationship marketing involves cultivating the right kind of Relationship with right kind of
groups.
Outcomes of Relationship marketing is to create marketing network which consist of customers,
employees, suppliers, distributors, retailer, agencies and so on.

Integrated Marketing
 The marketer task is to device marketing activities and assemble fully integrated marketing
programs to create, communicate and deliver value for customers.
 Marketing programs are the combination of decisions on value enhancing marketing activities
to use.
 Marketing activities are related with 4P or marketing mix.
 Product-
 Price
 Place
 Promotion

Two key out comes of integrated marketing are-

 Many different marketing activities are employed to communicate and deliver value and
 All corresponding activities are coordinated to maximize their joint effects

Internal marketing
Internal Marketing is the task of hiring, training and motivating to able employees who want to
serve customers well.

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  Internal marketing must take place on two levels-At one level think the various marketing
function-
» Sales forcing
» Advertising
» Customer service
» Product management
» Marketing research and so on
 Another level think about the customers wants, needs, demand and satisfaction.

Performance Marketing
Performance Marketing requires understanding the financial and nonfinancial returns to business
and society from marketing activities and programs.
Performance may be of two types-
 Financial Accountability
 Environmental and legal concern.
o Social Responsibility Marketing/ Societal marketing concept is fall under performance
marketing, build social and ethical consideration into their marketing parties.
o Focus on satisfying customer needs and wants while enhancing individual and societal well-
being.
o Consider the collective needs of society as well as customer desires and the organization’s
profits.
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